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BOARD OF INQUIRY {Human Rights Code) 



Ontario 



IN THE MATTER OF the Ontario Human Rights Code, R.S.O. 1990, c. H.19, as amended; 

AND IN THE MATTER OF the complaint by Dawn Kearney dated September 23, 1988, alleging 
discrimination in accommodation on the basis of age and sex by Bramalea Limited (now Bramalea 
Inc.). 

AND IN THE MATTER OF the complaint by J.L. dated June 25, 1990, alleging discrimination 
in accommodation on the basis of age and sex by The Shelter Corporation. 

AND IN THE MATTER OF the complaint by Catarina Luis dated May 4, 1992, alleging 
aUsciitnination in accommodation on the basis of sex, marital status, citizenship, place of origin, 
family status and receipt of public assistance by Creccal Investments Ltd. 

BETWEEN: 

Ontario Human Rights Commission 
- and - 

Dawn Kearney, JL and Catarina Luis 



Complainants 



and 



Bramalea Limited (now Bramalea Inc.), The Shelter Corporation and 
Creccal Investments Ltd., 



Respondents 



DECISION 



Adjudicators : Deborah Leighton, Ajit John and Mary-Woo Sims 

Date : 22 December 1998 

Board File No: BI-0213-92, BI-0214-92 and BI-0216-92 

Decision No : 98-021 



Board of Inquiry (Human Rights Code) 
505 University Avenue 
Suite 201 , Toronto ON M5G 2P3 
Phone (416) 314-0004 Toll free 1-800-668-3946 Fax: (416) 314-8743 
TTY: (416) 314-2379 TTY Tollfree: 1-800-424-1168 



APPEARANCES 



Ontario Human Rights Commission 



Anthony D. Griffin, Counsel 



Dawn Kearney, J. 
Complainants 



) 

L. and Catarina Luis, ) 

) 



Beth Symes and Bruce Porter, Counsel 
Catherine Bruce, Student-at-law 



Bramalea Inc., The Shelter Corporation, 
Respondents 



Ian Scott, Q.C., Christopher Dassios, 
Stephen Goudge, Q.C. and 
Martine Doane, Counsel 



) 

Creccal Investments Limited, Respondent ) 

) 



Gary Luftspring, Counsel 



ESTER VENORS: 



Thomas Wall, for the City of Toronto, Non-Profit Housing Corporation 
Nichola Savin, for Jessie's Centre for Teenagers, Young Mothers' Resource 
Group and Housing Equality for Youth 

Anthea Pascaris, for the Federation of Metropolitan Toronto Tenants' 
Associations and United Tenants of Ontario 

Allan Maclure, for Children's Aid Society of Metropolitan Toronto, 
Catholic Children's Aid Society of Metropolitan Toronto, Pape Adolescent 
Resource Centre, Native Child and Family Services, and Jewish Family and 
Child Service 

Melinda Rees, for National Anti-Poverty Organization, the Charter 
Committee on Poverty Issues, and the Ontario Coalition Against Poverty 
Jack Martin, for New Experiences of Latin American Refugee Women, 
Canadian African Newcomer Centre of Toronto, Toronto Refugee Affairs 
Council, and Centre for Spanish Speaking People 

Bruce Feldthusen, for The Supportive Housing Coalition of Metropolitan 
Toronto, Robin Gardner Voce Non-Profit Homes Inc., Woodgreen 
Community Housing Inc., and Housinfo Housing Development Resource 
Centre of Ontario 

Sheena Scott, Coalition of Youth Serving Agencies - Covenant House, 
Touchstone Youth Centre, Stop 86 

Katryn Pereira, The Disabled Women's Network Ontario and The Coalition 
of Visible Minority Women 



f 



: 



( 



TABLE OF CONTENTS 



INTRODUCTION 1 

PRELIMINARY MOTIONS 2 

Interveners 2 

Motion for an Adjournment of the Proceedings 3 

MOTIONS TO AMEND THE COMPLAINTS 7 

THE EVIDENCE 8 

Dawn Kearney 8 

Catarina Luis , 9 

J.L 11 

THE EXPERTS 13 

John Stapleton 13 

Chandra Pala 15 

Michael Ornstein 16 

a) Income Level of Equality Seeking Groups 17 

b) The Exclusionary Effect of Income Criteria (30%) on Equality Seeking 
Groups 19 

c) The Actual Rent-to-income Ratios of Equality Seeking Groups 20 

d) Comparisons Between Toronto and Brampton 20 

e) Ontario-Wide Patterns 21 

f) Exclusion of Equality-Seeking Groups from the Respondents' 
Apartments 22 

g) Present Tenants in the Three Respondents' Apartments 22 

David Hulchanski 23 

Maureen Callaghan 27 

Sister Mary Jo Leddy 27 

Nancy Webb 28 

Ann Fitzpatrick 28 

Barry Lyon and Gary Mcllravey 30 

The Evidence of the Respondents' Experts 32 

DECISION 32 

Catarina Luis v. Creccal Investments Ltd. ("Creccal") 35 

a) The Existence of the Factor 35 

b) The Effect of the Factor 35 

c) Membership in the Group(s) 37 

J.L. v. Shelter Corporation of Canada Limited ("Shelter") 37 

a) The Existence of the Factor 37 

b) The Effect of the Factor 38 

c) Membership in the Group(s) 39 



Digitized by the Internet Archive 

in 2014 



https://archive.org/details/boi98_021 



Dawn Kearney v. Bramalea Inc. ("Bramalea") 39 

a) The Existence of the Factor 39 

b) The Effect of the Factor 40 

c) Membership in the Group (s) 40 

The Effect of the Landlords' Decisions 40 

Section 11 Defence 41 

a) Reasonableness 43 

b) Bona Fides 49 

c) Undue Hardship 51 

Submission on Direct Discrimination 53 

Respondents' Submission 55 

summary , ... m . . . . g . *•* , , . . i , % . . m .• ■*■ . m 59 

ORDER 64 

APPENDIX 1 63 

Summary of Intervenors' Submissions 63 

1. The Corporation of the City of Toronto Non-Profit Housing Corporation 
("Cityhome") 63 

2. DAWN Ontario and the Ontario Coalition of Visible Minority Women 
(CVMW) 63 

3. Federation of Metro Tenants' Associations (FMT A) 63 

4. Refugee Groups (New Experiences for Latin American Refugee Women, 
the Canadian African Newcomer Centre of Toronto, the Toronto Refugee 
Affairs Council, the Centre for Spanish Speaking peoples) 64 

5. The Anti-Poverty Coalition (The Charter Committee on Poverty Issues, 
The National Anti-Poverty Organization and the Ontario Coalition 
Against Poverty) 64 



INTRODUCTION 



< 



Pursuant to subsection 38(1) of the Human Rights Code (the Code), we were 
appointed on June 10, 1993, by the Minister of Citizenship as a panel of persons 
appointed under subsection 35(1), to form a Board of Inquiry (the Board) to hear and 
decide the complaints of Dawn Kearney, J.L., and Catarina Luis (the complainants) 
alleging discrimination in accommodation on varying grounds by Bramalea Ltd., The 
Shelter Corporation, and Creccal Investments Ltd. (the respondents), respectively. 

Ms. Luis' complaint alleged that the use of an income criterion amounts to 
discrimination on the basis of sex, marital status, citizenship, place of origin, family 
status, and receipt of public assistance. J. L.'s complaint alleged that her application 
for an apartment was denied because of the application of an income criterion. She 
alleges this constitutes discrimination on the basis of age and sex. She also alleges 
that income criteria have an adverse effect on single women (marital status) and 
young people (age). Ms. Kearney's complaint alleged that Bramalea used an income 
criteria and the use of that criterion constitutes discrimination on the basis of age and 
sex. 

While the grounds of discrimination vary depending on the personal 
characteristics and situation of the complainants, the nature of the alleged 
discriminatory act is the same in all three instances. At issue is the respondents' use 
of income criteria to deny accommodation to the complainants. 

The Commission's position is that the application of the criteria constitutes 
adverse effect discrimination, because it is the application of a rule that results in the 
exclusion or the restriction or preference of a number of designated groups. The 
complainants' position is that this case involves systemic discrimination and the 
central issue is whether landlords are permitted to exclude protected groups using a 
mathematical formula, that is a rent-to-income ratio. Further, counsel for the 
complainants, Ms. Symes, alleged that alternate measures to that of income criterion 
such as the use of credit checks, co-signers, and previous rental history also violates 
the Code. Counsel did not argue that the landlords applied the income criteria 

( 



1 



differentially based on personal characteristics, but alleged instead that the use of 
income criteria resulted in direct discrimination for some protected groups. 

Counsels for the respondents Shelter Corporation and Bramalea, Mr. Goudge 
and Mr. Doane, agreed that an income criterion was applied in these cases. However, 
the respondents maintained that the issue is "whether or not the Code prohibits credit 
grantors, such as landlords, from determining who they should extend credit to on 
the basis of their ability to pay." It is their position that renting an apartment is in 
the nature of a credit transaction. Furthermore, they argued that the use of minimum 
income criteria does not discriminate or select on the basis of any of the prohibited 
grounds under the Code. The respondents take the position that income criteria is 
bona fide and that without the ability to screen tenants in this manner and thereby 
limit their risk, landlords would suffer undue business hardship. 

Counsel for the respondent, Creccal Investments, disputed that Ms. Luis had 
any grounds for a complaint. Counsel said that on the date in question, there was no 
apartment available to rent to Ms. Luis, therefore Creccal could not have 
discriminated against her. Creccal did not call evidence on the issue of whether the 
use of an income criterion was reasonable and bona fide, and relies on the evidence 
and submissions of counsel for Bramalea and Shelter on this issue. 

PRELIMINARY MOTIONS 
Interveners 

A number of organizations (the applicants) sought standing before the Board as 
intervenors. Counsel for the complainants argued that the Board should consider 
what type of intervenor status the applicants should be given. The issue was whether 
intervenors should be treated as parties with all the inherent rights and obligations, 
or as "friends of the Tribunal" with the participation rights being determined by this 
Board. 



2 



Counsel for the Commission, the complainants, and the respondents agreed in 
their submissions that the applicants should not be added as parties as they do not 
meet the requirements in Section 39 of the Code. While the applicants in their 
submissions did not ask to be added as a party to the complaint, they indicated that 
they would like to be considered as friends of the Tribunal and as such requested a 
wide range of participation, from adducing evidence with rights similar to a party, to 
making written submissions at the close of the case. Counsel for the parties agreed 
in their submissions that the applicants should be granted intervenor status as 
friends of the Tribunal, but urged us to restrict the intervenors to written submissions 
on the evidence. 

After considering the submissions of counsel for the parties and the applicants 
we granted intervenor status to the applicants. However, we restricted their 
participation in the process: all intervenors were permitted to submit a written brief, 
based on the evidence adduced at the hearing. We indicated that any brief not based 
on evidence before the panel would be of little assistance to us. 

Motion for an Adjournment of the Proceedings 

Counsel for respondents Bramalea Inc. and Shelter Corporation, Mr. Scott, 
moved for an adjournment of the proceedings on April 13, 1994, arguing that the 
Commission and complainants had not provided complete disclosure of their case. 
He asked for an adjournment of dates set in June and July 1994. Mr. Scott set forth 
the grounds for the motion as follows: 

1 . The Ontario Human Rights Commission has failed to provide 
complete disclosure of its case. The report of Dr. Hulchanski was 
only recently received, and is not complete. We have also been 
advised by Mr. Griffin that the Commission will be relying on 
further expert reports that it has yet to produce. Even if the 
Commission were to make complete disclosure immediately, there 
would be insufficient time for us to prepare the respondents' 
defence. 

2. The complainants have provided virtually no disclosure of their case. 
Even if they were to make complete disclosure immediately, there would 
be insufficient time to prepare the respondents' defence. 



3 



In support of his motion to adjourn, Mr. Scott cited R. v Stinchcombe [1991] 3 

S.C.R. (326), and Christian et al. and Northwestern General Hospital, (1993) 115 D.L.R. 

(4 th ) 279 (Ont. Div. Ct), a decision of the Divisional Court approving a board of 

inquiry decision which relied upon the reasoning of Stinchcombe. In Stinchcombe, Mr. 

Justice Sopinka held that: 

The Crown has a legal duty to disclose all relevant information to the 
defence. The fruits of the investigation which are in its possession are 
not the property of the Crown for use in securing a conviction but the 
property of the public to be used to ensure that justice is done. 

A new trial was ordered and all relevant information was ordered to be disclosed. In 

Northwestern General Hospital, the board, followed the reasoning in Stinchcombe, and 

ordered production of the Commission's witness statements and other documents 

related to the investigation. The Commission had refused to disclose names and 

statements of witnesses interviewed during the investigation to protect the 

confidentiality of the witnesses and to foster an environment where witnesses felt 

comfortable about coming forward with relevant and sometimes sensitive information. 

Furthermore, the Commission was concerned about the potential for intimidation of 

witnesses, who may have had continuing involvement with the respondents. The 

Commission also wished to guard against reprisals. In upholding the Northwestern 

General Hospital decision, the Divisional Court affirmed that the important principle 

enunciated in Stinchcombe is that: 

Justice was better served when the element of surprise was eliminated 
from the trial and the parties were prepared to address issues on the 
basis of complete information of the case to be met. It does not take a 
quantum leap to come to the conclusion that in the appropriate case, 
justice will be better served in proceedings under the Human Rights 
Code when there is complete information available to the respondents. 

Mr. Scott argued further that it would be a breach of natural justice to require the 

respondents to proceed with the hearings as scheduled. 

In opposing the motion of adjournment before us, counsel for the Commission 

replied that the Commission had already disclosed documents and witness 

statements to the respondents in compliance with the requirements for disclosure set 

out in Northwestern General Hospital. Mr. Griffin argued that in asking for further 

disclosure Mr. Scott was seeking a form of discovery. He argued further that under 



4 



the Statutory Powers and Procedures Act R.S.O. 1990, c.S.22, as amended 
(hereinafter SPPA) a respondent has a right under Section 8 to obtain particulars 
about the allegations. But the Commission does not have to provide the details of 
how it will prove its case. Mr. Griffin cited Dubajic et al v. Walbar Machine Products of 
Canada Limited (1994) 3 CHRR/2030 (Ont. Bd. Of Inq.) in support of his argument. 
In Walbar, the respondent argued that pursuant to Section 8 of the SPPA, it was 
entitled to get more information from the Commission before the hearing started. 
Counsel for the respondent in Walbar argued that Section 8 "required the Commission 
to go even further and disclose the evidence upon which it intended to rely in proof of 
its factual allegations." The Board in Walbar rejected this argument and held Section 
8 does not contemplate a means of obtaining discovery of documents for inspection or 
statements of evidence by which it is intended to make out a case. It was Mr. Griffin's 
submission in the case before the Board that the respondent had known from the 
beginning the particulars of the case and had had full disclosure as required by 
Northwestern General Hospital. 

With respect to the respondents' claim of insufficient time to prepare, Mr. 
Griffin pointed out that the expert reports referred to by the respondents were 
provided two and a half months before the hearing. The other reports would be 
available a month before the hearing. Mr. Griffin estimated that the respondents 
would have about five months of preparation before their first witness testified. 

In opposing the motion for adjournment, counsel for the complainants, Ms. 
Symes, adopted the submissions of Mr. Griffin and indicated that she had provided 
Mr. Scott with a list of witnesses. It was not complete as it depended upon the 
Board's ruling with respect to interveners. Ms. Symes undertook to provide a 
complete report on the information to be given by expert witnesses at least a month in 
advance of the date when the experts would testify. She argued that this was 
consistent with the Rules of Civil Procedure, by which the Board is not even bound. 

In relation to production, Ms. Symes argued that the Code provides the board 
with very limited powers. Once appointed, Section 39 requires the board to hold a 
hearing. It outlines who the parties are, and how parties are added. Subsection 39 
(4) says: 



Where a board exercises its power under clause 12 (l)(b) of the Statutory 
Powers and Procedures Act to issue a summons requiring the production 
in evidence of documents or things, it may, upon the production of the 
documents or things before it, adjourn the proceedings to permit the 
parties to examine the documents or things. 

There is nothing else in the Code which gives the board powers to control 
proceedings. The board must then turn to the SPPA to determine its powers. Section 
12 says: 

A tribunal may require any person, including a party, by summons, 

(a) to give evidence on oath or affirmation at a hearing; and 

(b) to produce in evidence at a hearing documents and things specified by the 
tribunal, relevant to the subject-matter of the proceeding and admissible at 
a hearing. 

Ms. Symes argued further that in Northwestern General Hospital the Divisional 
Court divided the human rights process into two stages. The first stage is the 
investigation stage and the second occurs after referral to the board. In Ms. Symes' 
submission, the Divisional Court approved the production of information contained 
during the investigation stage and this has been provided to the respondents. 
Documents produced for the purpose of litigation after the board was appointed 
should be excluded since a litigation privilege attaches to those documents. 

After considering the submissions of the parties, the request for adjournment 
by the respondents was denied. The Board was persuaded by the submissions of the 
Commission's and complainants' counsels, the provisions of the Code and the SPAA 
do not give the board of inquiry a general power to order discovery as opposed to 
disclosure. The Code and subsection 12(l)(b) of the SPPA give the board the power to 
issue a summons requiring the production of documents and to grant an 
adjournment for their review. Section 8 of the SPPA also entitles the respondents to 
disclosure of the particulars about the allegations. 

The respondents were asking for more than disclosure. They were asking for 
expert reports from the Commission and complainants be served on them at least 
three months before the hearing even though several had already been delivered and 
others were promised one month in advance of the hearing. 

There is no provision in the Code requiring production of an expert's report 
three months prior to the hearing, although it is especially helpful in a complex case 



6 



to provide expert reports well in advance of the hearing to avoid requests for 
adjournment. We were not convinced that there would be a breach of natural justice 
in going forward with the hearings scheduled through June and July if the 
respondents did not get the reports three months before the hearing. As Commission 
counsel indicated, given the length of the case it would be many days of hearings 
before the Commission's experts testified. 

We were satisfied that the Commission had provided disclosure consistent with 
the requirements in Northwestern General Hospital, and that the principles 
emphasized in Stinchcombe had been preserved. 

The respondents' motion for an adjournment was also based on the request for 
further disclosure of the complainants' case before proceeding. However, the request 
for disclosure was not specific. In her submissions, Ms. Symes indicated that she 
had provided a provisional list of witnesses. She argued, as did Commission counsel, 
that she was not required to hand over the evidence which she would call to support 
her case. The Commission had provided particulars and full disclosure of its case. 
We were not persuaded that the respondents had inadequate disclosure of the 
complainants' case. Nor were we persuaded that there would be a breach of natural 
justice in proceeding with the hearing. 

Although the Board denied the initial motion for adjournment, the hearing days 
scheduled for June and July were subsequently adjourned because of a serious 
illness of a counsel, and the hearing did not commence on the merits until December 
5, 1994. 

MOTIONS TO AMEND THE COMPLAINTS 

At the beginning of the hearing on the merits of the complaints, we made 
several rulings at the request and on the consent of the parties. Thus we granted the 
motion by counsel for the Commission to amend the complaint of Catarina Luis dated 
May 4, 1992, against Creccal Investments to include discrimination on the ground of 
race. Counsel for the respondent, Creccal Investments, did not object to the 



7 



amendment on the basis that the amendment is related to an allegation of systemic 
discrimination on the ground of race, and that there is no allegation of direct 
discrimination because of race. 

We granted the motion by counsel for the Commission to remove the personal 
respondents from all the complaints. Finally, we granted the motion by counsel for 
the Commission that the complainant J.L. be referred to as J.L. in all public 
statements including the Board's decision. The Board directed anybody who intends 
to report on this case, either to their own clients or to anyone else, to refer to this 
complainant as "J.L.". 



THE EVIDENCE 

The Board held over 60 days of hearings, over a period of three years. Given 
the extensive evidence tendered, we have summarized the evidence upon which we 
rely and, where necessary, to explain the reasons for our decision. Some of the 
evidence will only be referred to in our reasons for our decision. Much of the evidence 
of the individual complainants is not disputed. 

Dawn Kearney 

Ms. Kearney was 17 years old at the time of the complaint and had just 
completed Grade 10. She was married and living with her husband's parents and his 
sister in a three-bedroom apartment in a building owned by Bramalea. She was 
pregnant. Initially, her husband was earning $7.24 an hour. When this was 
increased to $9.24 an hour, Ms. Kearney and her husband decided to look for an 
apartment of their own. Their area of search was Brampton as they were familiar with 
the surroundings, and family and friends lived in the area. They decided they would 
be able to afford rent between $550 and $650 per month. They arrived at this 
amount because Ms. Kearney's in-laws were paying just over $650 plus parking for a 
three-bedroom apartment. 



8 



In the middle of September 1988, Ms. Kearney and her husband, Michael, went 
to Bramalea's office in Brampton. They met with a woman named Christine and 
asked for a two-bedroom apartment in the range of $600. Ms. Kearney said Christine 
asked if she was working, what her husband's job was, how long he had been 
employed there, and how much he made. She testified that she was told by the rental 
agent that they would have to make $30,000 a year in order to qualify for an 
apartment. The rental agent also mentioned that they were too young. Ms. Kearney's 
application for an apartment was denied. 

After having been rejected for an apartment, Ms. Kearney and her husband 
continued to live with her in-laws. Within weeks, she gave birth. Ms. Kearney 
described living with her in-laws as being very crowded. There was a lot of tension 
and arguments. There was no privacy. In the end, Ms. Kearney's in-laws left the 
apartment and Ms. Kearney, her husband, and her daughter occupied the apartment 
effective April 1, 1990. The amount of rent was $655 per month which was increased 
to $687 to include parking. Rental cheques made out to Bramalea from May 1, 1990 
to Nov. 1990, were submitted as evidence that Ms. Kearney and her husband paid 
their rent. The Kearneys vacated the apartment at the end of February 1991. 

Catarina Luis 

Ms. Luis is a refugee from Angola. She left Angola after her husband, who was 
affiliated with the opposition party in Angola, disappeared. When she arrived with 
her two-year-old daughter in Canada on January 1, 1988, she spoke no English. 
First she stayed at a battered women's centre and then at a Salvation Army family 
resource centre in Brampton. After a series of temporary accommodations, Ms. Luis 
found a basement apartment in Toronto and moved in on November 1, 1988. The 
rent of $550 a month was reduced by the landlord to $500 after she told him of her 
difficult circumstances being a refugee and single mother. The rent was increased a 
year later to $523. Ms. Luis was not satisfied with the conditions of the apartment: it 
was damp in the winter and very hot in the summer. There was also a problem with 
insects and mice. As a result, in the summer of 1990 Ms. Luis started to look for 



9 



apartments through newspaper advertisements, friends, and by walking around and 
looking for "for rent" signs. She found an apartment that she was very interested in at 
The Crossways. Ms. Luis produced a newspaper clipping, which was verified as 
coming from the August 17, 1990, edition of the Toronto Sun. The clipping read: "At 
Dundas West Subway Bachelor at $585, 1 bdrm. at $760, util. incl. Pool, gym, air, 
laundry, shops, lakeview. 2340 Dundas West." This is the building known as The 
Crossways, owned by Creccal Investments. 

Ms. Luis testified that $700 a month was the maximum she could afford to pay 
for an apartment. She said that in order to arrive at this figure, she added her income 
(family benefits and earnings from a part-time job) and subtracted her cash costs. 

Ms. Luis testified that she called The Crossways and asked if the bachelor 
apartment advertised was still for rent and was told that it was still available. She 
went to the Crossways with her then four-year-old daughter arriving approximately an 
hour after the phone call. The receptionist told her to wait for the rental agent. While 
Ms. Luis was waiting, she filled out a "guest card" which requires disclosure of 
individual yearly income. 

Ms. Luis testified that she waited for about 15-20 minutes and the rental 
agent, later identified as Ms. Gravelle, came in to see her. Ms. Luis asked to see the 
bachelor apartment that was for rent, but Ms. Gravelle said that the apartment was 
not available. Ms. Luis testified that she told the rental agent that she was told an 
hour before that it was available. Ms. Luis testified that Ms. Gravelle asked how 
much she made to which she replied between $1,500 - $1,600 a month. Ms. Gravelle 
then told her that it was not enough. She was told that she had to make at least 
$2,000 a month in order to rent the bachelor apartment. This was a policy of the 
landlord. Ms. Luis testified that she called The Crossways soon afterwards without 
identifying herself to see if the bachelor apartment was still available and was told it 
was. 

The only evidence in dispute is whether there was an apartment available when 
Ms. Luis applied to Creccal on August 17, 1990. Evidence of the respondents was 
that there was no apartment available on that day. However, the evidence of Ms. Luis 
was that she was told there was an apartment available and the newspaper 



10 



advertisement stated this and that is why she attended at The Crossways. It does not 
matter whether there was a vacant bachelor available on August 17 as the evidence 
indicated that there was constant turnover of apartments at The Crossways. Mr. 
Luigi Di Geso, an employee of Creccal, gave evidence that from August 17, 1990, to 
August 31 1990, seven bachelor apartments and one junior bedroom apartment were 
available for rent between September to November. These apartments were all within 
the cost that Ms. Luis had determined she could afford to pay. We have no doubt 
that if Ms. Luis had met the respondents' income criteria she would have received one 
of the next vacant apartments. 

Ms. Luis said that after she was turned down by The Crossways, she continued 
to live in the basement apartment for a little more than a year and finally rented a 
bachelor apartment downtown. Ms. Luis provided the Board with copies of her rent 
payments in the amount of $630 a month, paid over the next year. She had to come 
up with first and last months' rent in the amount of $1,260 when she first moved in. 
Ms. Luis described the conditions in the building as not being desirable nor having 
the amenities that she saw advertised at The Crossways. The apartment she wanted 
to rent at The Crossways was $585 per month. 

Ms. Luis currently rents an apartment for $690 per month. She is on social 
assistance and her benefits total $1,469 per month. Her rent is 47% of her income. 
Ms. Luis testified that her first priority at the beginning of the month is to pay the 
rent. She then described various coping methods she uses to deal with her income 
and expenses: walking or taking public transit instead of taxis; rarely buying clothes 
for herself or her children and buying all clothes as cheaply as possible; going to food 
banks or to the Goodwill store. 



J.L. 



J.L. was not called as a witness. Ms. Marta Dickinson, referred to in J.L.'s 
complaint as Marta Ready, was called. Ms. Dickinson said that she and J.L. were 
interested in renting an apartment together. They were looking for a two-bedroom 
apartment in the Meadowvale area. J.L. wanted to be close to her school and Ms. 



11 



Dickinson was working at Meadowvale Town Centre. This was also close to Ms. 
Dickinson's family and friends. They had not worked out how much rent they felt 
they could afford before setting out on their search. She was 18 at the time and J.L. 
was 16. Ms. Dickinson was working at Kinney Shoes and being paid $6.50 per hour 
plus commission. Her pay cheque was about $625 - $675 net every two weeks. 

Ms. Dickinson said that after finding an advertisement in the newspaper for a 
place called Aquitaine Shores, which is owned by Shelter Corporation, she and J.L. 
went to the rental office of Aquitaine Shores on June 1, 1990, and met with a rental 
agent. The rental agent showed them two available apartments. Both apartments 
cost $906 per month. They chose the apartment with beige carpet and were told by 
the rental agent that it would be available June 9, 1990. They returned to the rental 
office and filled out application forms. Ms. Dickinson said that the rental agent asked 
how old they were and how much money they earned. She said the rental agent 
seemed surprised by their ages. 

Ms. Dickinson said that she was told by the rental agent that she needed a 
letter from her employer, which she obtained, and that they needed to have first and 
last month's rent. They understood from the rental agent that if they met those 
conditions, they had the apartment as of June 9, 1990. It was a Friday when they 
filled out the application, and Ms. Dickinson said she was told that they had until 
Monday to bring in the employer's letter and the money. On Monday, they complied 
with both requests. 

Ms. Dickinson went in on Monday and gave the rental agent a cheque for $906 
and a letter from her employer. She said that she and J.L. had agreed that one of 
them would cover the first month's cheque and the other, the last month's cheque. 
Ms. Dickinson said that J.L. delivered her cheque for $906 the same day. 

Ms. Dickinson said that two days later, she went to Aquitaine Shores to show 
one of her friends where she would be living. The rental agent told her to see the 
property manager and she did. Ms. Dickinson was told by the property manager that 
she and J.L. did not qualify for the apartment. The property manager gave her back 
her application and the cheque, and told her that they weren't making enough money. 
Each one of them had to be making enough money to cover the month's rent. The 



12 



property manager said specifically that they had to be making over $32,000 a year 
each. She said that the application form along with their two cheques were returned 
to her. 

Ms. Dickinson was shown their application for tenancy which contained their 
birthdates, her employer, and her annual income of $16,000 from two part-time jobs. 
Under cross-examination, Ms. Dickinson admitted that this amount was a rough 
estimate of her earnings. There is a line through the application stating "declined - 
insufficient income and no credit references, June 6, 1990." 

THE EXPERTS 
John Stapleton. 

Mr, Stapleton was qualified as an expert in social assistance policy 
development and was called to give evidence with respect to the evolution and 
development of social assistance programs in the province of Ontario. Mr. Stapleton 
provided the Board with his "Report on Social Assistance Programs in Ontario." His 
report included the historical development of social assistance which we will not 
summarize here but which was helpful in understanding the historical framework of 
Ontario's care of its poor and how that shapes the attitudes that society has towards 
the poor today. We were persuaded by Mr. Stapleton's evidence that these attitudes 
result in discrimination against the poor who are seeking accommodation. 

Mr. Stapleton also described how social assistance is obtained in Ontario 
under the Family Benefits Act (FBA), and the General Welfare Act (GWA). Various 
rules and financial testing exist under both regimes, but Mr. Stapleton commented 
that GWA financial testing is more stringent than under FBA. The GWA, commonly 
known as welfare, is generally a short-term program. Persons collecting GWA are 
generally those who are unemployed employable persons, those who have exhausted 
their Employment Insurance Benefits or were not eligible for employment insurance. 



Mr. Stapleton said the most recent changes to social assistance benefits came 

about as a result of a report of the Social Assistance Review Committee called 

"Transitions." This 1988 report made 274 recommendations in social assistance and 

related areas. According to the report: 

... in most larger urban centres, rental accommodation can consume 
40% to 70% of monthly benefits. There is general acceptance that 
households should devote no more than 30% of income to cover shelter 
costs if they are to retain sufficient resources to purchase other basic 
necessities required to operate and maintain a household." 

The report further provides: 

While a 30% affordability threshold may be acceptable for single people, 
many housing analysts would support the use of even a 20% or 25% 
affordability threshold for families. The reality however, is that in 
Toronto ... a substantially higher proportion of recipients (were) paying 
more than 50% of their incomes on rent. 

Mr. Stapleton also explained how refugee claimants became eligible for social 
assistance. 

In a Divisional Court decision in 1984, the province was found to be 
erring in law in terms of when it did not allow refugee claimants to be 
eligible for assistance because they were not landed, and therefore not 
residents of Canada. The social assistance ... administrators then were 
told that they had made an error by excluding them on residency 
grounds. 

Mr. Stapleton explained that the reasons why so many refugee claimants are on social 
assistance is because they are unsponsored. Sponsored immigrants have Canadian 
sponsors who contract with the federal government to provide them with the 
necessities of life. Further, in the mid-1980s the federal government decided for 
policy reasons that work permits would not be provided to refugee claimants, so a 
very high proportion of refugee claimants had to go on social assistance. This policy 
was changed in early January 1994 and refugees are now allowed to apply for work 
permits. 

Mr. Stapleton described being poor in Ontario as not having enough money to 
be able to meet the basic necessities of life: food, clothing, shelter and personal care. 

Mr. Stapleton addressed some of the myths that have arisen concerning 
persons on social assistance. One myth is that people on welfare move a lot. Mr. 



14 



Stapleton testified that there is no evidence that people on assistance move more 
frequently than anyone else. Another myth is that social assistance recipients are 
irresponsible with their money. Mr. Stapleton said that given the average amount 
that a recipient has to spend on shelter and the high number of recipients who have 
to use food banks, it is almost impossible to spend the money irresponsibly as it is 
applied to necessities. In addition, Mr. Stapleton said that some landlords believe 
that persons in receipt of public assistance will not take care of the (landlord's) 
property, that the property will be abused. Some believe that they will not be paid on 
time. Some believe that social assistance is not a secure form of income, and that the 
person may not have the money to pay for the accommodation or use the money for 
other things and neglect to pay their rent. Mr. Stapleton said that the impact of these 
myths is that social assistance recipients have a harder time finding accommodation. 

Mr, Stapleton testified that vacancy rates also have an effect on a recipient's 
ability to obtain accommodation. When the vacancy rate is low, recipients have a 
harder time obtaining housing. When the vacancy rate is high, there is a greater 
possibility of securing housing. 

Chandra Pala 

Mr. Pala is an expert in both statistics and social assistance policy analysis. 
Mr. Pala provided the Board with his "Report on Ontario's Social Assistance Rate 
Structure." He gave evidence on the policy of the government, the statistics with 
respect to the profile of social assistance recipients in Ontario, and a profile of low 
income people in Ontario and the cost of housing for both groups. The following is a 
summary of the evidence which was helpful to the Board in assessing the impact of 
income criteria on people in receipt of social assistance. 

Mr. Pala reviewed the various income support programs available at the federal 
and provincial levels of government, and how rates for social assistance are set in 
Ontario. He then explained that there are two major components of social assistance 
benefits, the basic allowance and the shelter allowance. 



15 



Mr. Pala testified that in 1989, the Social Assistance Review Committee found 
that shelter allowances were inadequate and complicated. A variety of 
recommendations were made. Using the example of a sole support parent with one 
child under nine, Mr. Pala explained how the benefits would be calculated: basic 
allowance for the adult is $268 and for the child it is $218 for a total of $486 per 
month. Furthermore, there is now a "basic shelter" allowance which for a family of 
two is $185 which would make the total $671. With respect to the shelter costs, any 
costs in excess of $185, would be paid up to $550 of shelter cost or $365 of variable 
shelter allowance. In other words, the minimum is $185 and the maximum is $550. 
The maximum monthly allowance this family would get is $1,036 per month, an 
increase from the rate paid before the reform. 

Mr. Pala testified that given the rate structure for assistance, if a landlord 
required an annual income of $22,000 for an apartment which costs $585 to rent, no 
one on social assistance would meet that qualification. 

Mr. Pala provided the Board with statistics available through Ministry of 
Community and Social Services, on the breakdown of persons who are on social 
assistance. In 1990, 37.3% of recipients were sole support parents. In 1994, 33.4% 
were sole support parents. Based on 1990 statistics, Mr. Pala outlined in his report 
the type of accommodation persons receiving assistance were living in : 

• 6% of recipients are home owners, 

• 14.2% are in public housing such as that which is provided by the Ontario 
Housing Corporation and municipally owned housing, 

• 61.1% of recipients rely on housing that is available through private for- 
profit landlords. 

The reliance on private, for-profit housing increased to 71.8% in 1994. 
Michael Ornstein 

Dr. Ornstein is a sociologist and statistician, and was qualified as an expert 
witness to provide the Board with his evidence and report "Income and Rent: Equality 
Seeking Groups and Access to Rental Accommodation Restricted by Income Criteria." 
Dr. Ornstein used the term "equality seeking groups" to identify people protected by 



16 



the Code. Dr. Ornstein addressed issues related to the differences in income of 
protected groups and the general population and access of protected groups to 
housing. He also addressed the question of whether having less income means more 
percentage of income must be spent on rent. 

The data contained in Dr. Omstein's report come from a variety of sources 
including census data from the Toronto Metropolitan Area (CMA). Dr. Ornstein also 
provided figures based on the census for Brampton (where Ms. Kearney was 
attempting to rent an apartment from the respondent Bramalea) and compared them 
to the Toronto CMA figures. He also provided the Board with analysis on Ontario- 
wide patterns. 

Dr. Ornstein's analysis of the data contained in his report and in his testimony 
was of assistance to the Board in understanding the impact on protected groups when 
landlords use income criteria. A summary of his evidence is as follows. 

a) Income Level of Equality Seeking Groups 

Lone Parents 

• 90% of lone or single parents are female 

• of the female lone parents who rented, 51% had incomes of less than 
$25,000 

Age 

• about two-thirds of all unattached persons are under the age of 20 

• 68% of unattached women under the age of 20 have less than $10,000 in 
income 

• 96% of unattached women under the age of 20 have less than $25,000 in 
income 

• of couples in a two-person household under the age of 20, 16% of those 
who have female partners have incomes of less than $10,000. 20% of those 
who have male partners have incomes of less than $10,000 



• of couples in a two-person household under the age of 20, 44% of those 
who have female partners have incomes of less than $25,000. 50% of those 
who have male partners have incomes of less than $25,000 

Race 

• of unattached women, 34% of First Nations women, 22% of Black women, 
23% of South Asian women, 23% of East and Southeast Asian women, and 
35% of West Asian women have less than $10,000 in income. 13% of non- 
minority women have incomes of less than $10,000 

• of unattached women, the figures for those who have incomes of less than 
$25,000 is: 73% of First Nations women, 70% of Black women, 70% of 
South Asian women, 73% of East and Southeast Asian women, 82% of West 
Asian women, and 56% of non-minority women 

Citizenship, Immigration Status and Place of Origin 

• non-citizens have less income than citizens 

• among female lone-parents, non citizens are roughly 5% more likely than 
citizens to be in the lowest income categories 

• non-permanent residents (which include refugees as well as people with 
student and work permits) have the lowest incomes 

• people born in Canada have the highest incomes 

• for unattached women, 58% of the women from Africa have incomes below 
$20,000 compared to 41% of women bom in Canada 

Dependence on Social Assistance 

• the Census provides information on the amount of "other government 
income" received in a year 

• of unattached women who receive government income, approximately 92% 
have under $20,000. 



IS 



b) The Exclusionary Effect of Income Criteria (30%) on Equality Seeking Groups 

The methodology used by Dr. Ornstein to determine the exclusionary effect of 
income criteria on equality seeking groups is contained in his report. Dr. Ornstein 
divided rents into three categories, "low rent," "very low rent," and "median rent" 
accommodation. His conclusions are as follows: 

• one half of all unattached women are unable to meet the 30% income 
criterion applied to low rent accommodation 

• of female lone parents, 51% are unable to meet the criterion for "low rent" 
accommodation 

• 92% of all unattached women under the age of 20 do not have sufficient 
income to qualify for low rent accommodation 

• 77% of couples in which the male partner is young (under 20 years of age) 
do not qualify for low rent accommodation 

• members of racial minorities are less likely to have access to rental 
accommodation restricted by income criteria 

• citizens, people born in Canada, and less recent immigrants have higher 
incomes and are more likely to meet income criterion than recent 
immigrants and non-permanent residents 

• those who are more dependent on government income are less likely to meet 
income criterion. 

Dr. Ornstein concluded that : 

Young unattached people, young lone parents, and unattached people 
who are dependent on social assistance are almost completely excluded 
from accommodation restricted by income criteria. All recent 
immigrants, not only refugees whose position would surely be still 
worse, are also denied access to most rental housing restricted by 
income criteria. Other equality seeking groups, including visible 
minorities, non-citizens, and people born outside Canada also have 
significantly less access to restricted accommodation.... 



19 



c) The Actual Rent-to-income Ratios of Equality Seeking Groups 

Dr. Ornstein also provided this Board with pertinent information on the actual 
situation of renters, that is, the ratio of income equality seeking groups pay now on 
rent. Dr. Ornstein's data is as follows: 

• between one quarter and a third of all tenants pay 30% or more of their 
income on rent 

• of those who pay more than 30% of their income on rent, they include: 37% 
of all unattached women; 47% of all female lone parents; and 22% of all 
couples in two-person households 

• the lowest income groups devote dramatically more of their resources to 
rent 

• female lone parents with under $10,000 in household income pay 89% of 
that income on rent; those under $20,000 in household income pay 64% of 
their income on rent; and for those under $30,000 in household income pay 
43% of their income on rent 

• unattached women with under $10,000 in personal income pay 70% of 
their income on rent; those under $20,000 in personal income pay 83% of 
their income on rent; and for those under $30,000 in personal income pay 
50% of their income on rent 

• if every landlord in the CMA imposed a 30% income requirement in order to 
rent units in their apartment building, between a third and a quarter of 
them would be homeless and landlords would be dealing with 25% - 33% of 
the units being vacant 

Dr. Ornstein concluded the fact that "poor people devote so much of their 
income to rent is neither voluntary, nor the result of poor apartment-hunting; rather it 
reflects the price of housing, which is a necessity." 

d) Comparisons Between Toronto and Brampton 

It was Dr. Ornstein's opinion there was little difference between the income and 
accommodation situation in the Toronto CMA and in Brampton. Brampton is 



20 



different in a number of respects in terms of the population and cost of housing, but 

the basic patterns are extremely similar. 

The similarity between Brampton and Toronto arises from the continuity 
in the housing and labour markets in the two locations, which is 
brought about by the high levels of mobility in the larger urban centres 
surrounding the Toronto CMA. These results also show that Dawn 
Kearney's experience of being denied accommodation because of income 
criteria is typical of the effect of such criteria on equality seeking groups 
in the community of Brampton. 

e) Ontario-Wide Patterns 

Dr. Ornstein reported on whether the patterns observed in Toronto and 
Brampton prevail across Ontario. For this analysis, he divided the province into six 
geographic categories. The three largest CMAs in Ontario, Toronto, Hamilton and 
Ottawa, were treated separately, and the remainder of the province was divided into 
three categories: rural areas and urban areas with less than 100,000 population; 
urban areas with 100,000 or more population, excluding CMAs; and the combination 
of the four smaller CMAs Kitchener-Waterloo, London, St. Catharines, and Windsor. 

Dr. Ornstein determined that in all six areas, female lone parents are the most 

likely to be paying 30% or more of their income in rent. Further in all the locations, 

couples are the least likely to pay 30% or more of their income in rent. The broad 

patterns of household income, rent-to-income rations, and differentials in the ability 

to qualify for housing restricted by income criteria, are very similar. Finally, that 

there is regional variation in Ontario, reflecting segmentation in the labour and 

housing markets and demographic differences between regions, but the general 

patterns, such as the disadvantaged position of female-headed lone parent families, 

young people, and recent immigrants, are the same. Dr. Ornstein said: 

Nearly one-third of all tenants in Ontario and even larger proportions of 
the tenants in equality seeking groups actually pay more that 30% of 
their income for accommodation. Were all landlords to apply income 
criteria, about one-third of all tenants in Ontario would have to move to 
other housing. 



21 



f) Exclusion of Equality-Seeking Groups from the Respondents' Apartments 

Dr. Ornstein examined the situations of the three complainants in terms of rent 
levels and income criteria. 

Ms. Luis was told that she had to make at least $2,000 a month when she 
attempted to rent an apartment at The Crossways (the building owned by the 
respondent Creccal Investments). This amounts to an annual income of $24,000. Dr. 
Ornstein used the figure of $23,400 in his report as annual income. When looking at 
the income levels of equality seeking groups, Dr. Ornstein concluded that "...on all the 
grounds cited in Ms. Luis' complaint, the rent levels and income criterion in force at 
The Crossways systematically disadvantage equality seeking groups." 

J. L. alleged discrimination on the basis of sex and age when she and a friend, 
Ms. Dickinson, attempted to rent an apartment at Aquitaine Shores (the building 
owned by the respondent Shelter Corporation). They were not allowed to combine 
their incomes in meeting the criterion. Dr. Ornstein concluded that 98% of 
unattached women who were under the age of 20 did not have sufficient income to 
qualify as tenants. "Thus young unattached women are virtually excluded from 
Aquitaine Shores." 

Ms. Kearney alleged discrimination on the basis of sex and age when she 
attempted to rent an apartment at a building owned by the respondent Bramalea Inc. 
Dr. Ornstein concludes that "... the income criterion employed in the Bramalea 
building differentially excludes young people." 

g) Present Tenants in the Three Respondents' Apartments 

Dr. Ornstein conducted a survey in June 1994 of the tenants who currently 
rent at Aquitaine Shores, Bramalea, and The Crossways to determine the actual 
representation of tenants in these buildings. Dr. Ornstein used the income criterion 
cited in the complaints, 25%, 30% and 36%, and applied them to the corresponding 
buildings. There was a 50% response rate across all three buildings. Dr. Ornstein 
found that at all three locations there were substantial numbers of tenant households 
whose income is too low to meet the various income criteria: 7% of The Crossways 



22 



tenants, 30% of the Bramalea tenants, and 13% of the Aquitaine Shores tenants have 

incomes below $20,000. He also determined that the representation of low income 

households in the apartments could not possibly have resulted from tenants moving 

into the building and having their economic circumstances change afterwards. 

Further, Dr. Ornstein reported that at The Crossways, 41% of the apartments are 

rented by households in which rents exceed 30% of the household income. At 

Aquitaine Shores, 25% of the households exceed a 30% income criterion and 17% 

exceed 40% (the criterion in J.L.'s case was 36%). At Bramalea, 50% of the 

households were beyond the 25% criterion. Dr. Ornstein concluded that: 

Even allowing for a great deal of imprecision in these findings, the 
present distribution of incomes in the respondents' buildings is not 
compatible with the use of the income criteria that were employed at the 
time the complainants sought housing. ... In light of these findings, one 
of our purposes in conducting the survey, to determine whether equality 
seeking groups were effectively excluded from the buildings as a result of 
the use of income criteria, no longer makes sense. It appears that the 
increased vacancy rate that followed the onset of the recession forced 
landlords to choose between using income criteria to assure desirable 
tenants and having vacant apartments. Given this choice, landlords 
appear to have abandoned the rigid application of income criteria as a 
means of selecting tenants. 

Dr. Ornstein 's evidence persuaded the Board that there is ample evidence to 
conclude "that income criteria differentially affect equality seeking groups, defined on 
the basis of sex, marital and family status, age, citizenship, race, immigration status, 
place of origin and being in receipt of social assistance." Dr. Ornstein 's evidence on 
cross-examination was consistent with his evidence-in-chief. 

David Hulchanski 

Dr. Hulchanski was qualified as an expert in Canadian housing policy, rental 
housing policy including housing programs and problems, and housing affordability 
to give us his expert opinion and report entitled "Discrimination in Ontario's Rental 
Housing Market: The Role of Minimum Income Criteria." Background paper #1 - 
"How Households Obtain Resources to Meet their Needs: The Shifting Mix of Cash 
and Non-Cash Sources" defines income and how it relates to the calculation of income 



23 



criteria. Background paper #2 - "The Use of Housing Expenditure-to-income Ratios: 
Origins, Evolution and Implications" addresses, as the title indicates, the origins, 
evolution, and implications of using the housing expenditure-to-income ratio. 

Dr. Hulchanski drew a link between the concept of housing affordability and 
the use of income criteria. Minimum income criteria are used to determine the 
threshold of affordability. In other words, the inference is that if one pays over what 
one can afford, default in the rent is more likely. 

Dr. Hulchanski called the minimum income criteria "a rule of thumb." His 
research did not reveal when the practice of using this rule in the residential rental 
market began nor when its use became so widespread. "In Canada the 20% rule 
lasted until the 1950s when somehow the 25% rule came into use, only to be replaced 
in the 1980s by the 30% rule." 

Dr. Hulchanski's background paper #2 traced the origin and evolution of the 

minimum income criterion which has its roots in the 19 th century and became part of 

the conventional wisdom associated with housing during the first half of the 20 th . It 

was used mainly by both the private and public sectors in an attempt to describe 

average household expenditures on housing. According to Dr. Hulchanski, there was 

little analysis of the ratio as a valid and reliable measure. The ratio became an 

established "rule" providing a summary description of the maximum proportion of 

income that should be devoted to rent or to a mortgage. 

This assertion that rents or mortgage payments should not exceed a 
certain percentage of income permeates housing discussion throughout 
the 20 th century. For some, the housing expenditure-to-income ratio 
became a measure of housing affordability for public policy purposes — 
a rule used in allocating public housing units. For others, it became a 
measure of ability to pay -- a rule used in making business decisions 
(decisions about who to rent to and who to grant a mortgage to). Yet, as 
this history of the origins and evolution of the measure has found, it is 
difficult to find the users of this statistical average "rule of thumb" 
offering any empirical rationale in support for its validity and reliability 
as a measure. There is no study or set of studies or body of literature 
concluding that a certain ratio or any ratio is an appropriate measure of 
what a household ought to spend or is able to spend. 

Dr. Hulchanski said there are six uses of the expenditure to income ratio. They 
are: description (describe a typical household's housing expenditure); analysis 



24 



(analyze trends, compare different household types); administration (administer rules 

defining who can access housing subsidies); definition (define housing need for policy 

purposes); prediction (ability of a tenant household to pay market rent); and selection 

(select tenants who can afford to pay the rent). Dr. Hulchanski divided the list into 

two categories. In Dr. Hulchanski's opinion 

The first three uses — description, analysis and administration — can be 
considered quite valid and helpful when used properly by housing 
researchers and administrators. "Used properly" means that the 
research methods and the statistical analysis techniques are properly 
carried out — i.e., no significant methodological errors are made. This 
leads to valid and reliable descriptive and analytic statements about the 
housing expenditures of the different types of households being studied. 
This type of description and analysis of household expenditure patterns 
can also be helpful in defining administrative rules about eligibility for 
means-tested, as opposed to universal, housing programs. 

The improper and inappropriate use of housing expenditure-to- 
income ratios leading to invalid and unreliable results, is due to a 
variety of theoretical and conceptual errors. Uses four, five and six — 
definition, prediction, and selection — are all invalid uses for they fail to 
measure what they claim to be measuring, even if the research methods 
and the statistical analysis techniques are properly carried out. The 
ratio is faulty when used to define housing need and to predict the 
ability of households to pay for housing due to a faulty conceptualization 
of the income part of the ratio... An additional conceptual problem 
arises because it applies a statistical average of a group of households to 
an individual household, leading to the problem of statistical 
discrimination. 

In Dr. Hulchanski's report and in his background paper he outlined his 
reasons for his opinion that the ratio is not a valid measure of housing affordabiliry. 
The ratio only measures income, that is money income, and ignores other sources of 
support by which households meet their needs. Dr. Hulchanski explained that most 
households in Canada draw resources from the "five economies." There is the 
domestic economy, which is internal to a household, and is a form of self-provisioning 
(it is cheaper to cook for ourselves than go to restaurants which require cash). The 
second economy is called the informal economy, and includes extended family and 
close acquaintances, even co-workers, who provide all kinds of assistance (for 
example, a neighbour who is an electrician and makes a repair free of charge). The 
third economy all households draw on is the social economy. This includes the 



25 



neighbourhood and community based agencies and groups, the voluntary sector, the 
charitable sector, non-profit sector, local social agencies, non-governmental agencies 
of various types. The fourth economy is the market economy, which is the major 
source of cash income. Finally, one can obtain resources from the government or 
state economy, such as social assistance as well as other kinds of assistance like job 
training, unemployment and old age pensions. 

In Dr. Hulchanski's view, these economies explain why people and/ or 
households can spend a high percentage of their income on housing without being in 
severe trouble. In his opinion, the rent-to-income criterion mainly assesses the 
market economy. It considers the state economy to some extent. Further, reliance on 
other economies is the reason why the incidences of defaults on mortgages and rents 
are not high. It was his evidence that "... more than 30% of owners with mortgages 
and renters in both Ontario and Metropolitan Toronto spend at least 30% of their 
household income on housing costs. The Social Assistance Review Committee (1988) 
reported that in Toronto, Ottawa, Hamilton, and Waterloo, 70% or more of social 
assistance recipients were devoting 40% or more of their incomes to rental payments 
in 1986." 

In Dr. Hulchanski's opinion, if the housing expenditure-to-income ratio being 
used by the public and private sectors was a valid and reliable measure of 
affordability and ability to pay, these figures would indicate that the country was 
facing a huge default rate in rent and mortgage payments. In Dr. Hulchanski's 
opinion this is an example of how income criteria does not stand up to empirical 
testing. It does not explain how it is possible that households (especially those with 
lower than average incomes and those in receipt of social assistance) can survive and 
continue to meet their housing needs when their shelter costs amount to so much 
more of their household income. In his view, the answer lies in recognizing the 
inadequacy of "household income" and "household budgets" as a measure of a 
household's ability to pay. Measures of ability to pay must recognize the multiple 
economies and shifting mix of resources. 

In cross-examination, Dr. Hulchanski consistently defended his opinion that 
the rent-to-income ratio serves no usefulness as a predictor of default. He reiterated 



26 



that the failure of landlords to take into account the "five economies" results in the 
screening out of tenants who may be very good tenants. Dr. Hulchanski 
acknowledged that he could not prove nor disprove a link between income and 
default. Dr. Hulchanski emphasized that households draw on a variety of supports 
when a life event hits them. 

Dr. Hulchanski agreed on cross-examination that landlords do not appear to be 
uniform or absolute in the application of a 30% rent-to-income ratio. He also agreed 
that there is a point at which a household will have difficulty paying the rent. 
However, the household may not default: they could choose to move to a cheaper 
place. 

The Board was persuaded by Dr. Hulchanski's evidence that rent-to-income 
ratios, presently used by landlords, are not a valid criterion for assessing a person's 
ability or willingness to pay rent, nor that it predicts default. Nothing on cross- 
examination or in the respondents' evidence persuaded us that his opinion was 
wrong. 

Maureen Callaghan 

The Board heard evidence from Maureen Callaghan, who is the housing 
coordinator with Jessie's Centre for Teenagers. Jessie's is a multi-service agency for 
pregnant and parenting teenagers. Ms. Callaghan submitted a report on the negative 
effects of minimum income criteria on pregnant and parenting teenagers. She gave 
evidence concerning the experiences and difficulties of pregnant and parenting 
teenagers in finding accommodation. Ms. Callaghan stressed the importance of 
housing in providing stability for a young person who is struggling both with 
becoming an adult and being a parent. 

Sister Mary Jo Leddy 

Sister Mary Jo Leddy gave evidence concerning the experience and difficulties 
of refugees in obtaining housing from private landlords using income criteria. Sister 



27 



Leddy is the executive director of Romero House, which is a resettlement house for 
refugees. The average stay of a refugee and his or her family is six to nine months. 
Romero House staff assist refugees in finding more permanent housing. Sister Leddy 
gave evidence concerning the difficulties of refugees in obtaining co-signers and credit 
references since they are new to the country. It is difficult for refugees to come up 
with first and last months' rent as they arrive in Canada with virtually no money. 

Nancy Webb 

Nancy Webb is the executive director of Touchstone Youth Centre, which is a 
shelter for homeless youth. Ms. Webb talked about the difficulties that young persons 
have in finding shelter where an income criteria is applied. Ms. Webb described the 
barriers experienced by homeless youth in obtaining housing: lack of rental history; 
lack of a guarantor; lack of money as they are often without a job. It was her 
evidence that as a result of their age, they are not seen by landlords to be stable or 
mature enough to rent an apartment. 

Ann Fitzpatrick 

Ms. Fitzpatrick was qualified as an expert in child and family services and gave 
evidence with respect to the impact of the shortage of housing on children and their 
families. Ms. Fitzpatrick submitted a report entitled "Effects of Minimum Income 
Qualifications on Families with Children and Youth Seeking Housing." Ms. 
Fitzpatrick has worked over the past 12 years with the Catholic Children's Aid Society 
of Metro Toronto (CCAS) and the Children's Aid Society of Metropolitan Toronto 
(CASMT). She has had extensive experience addressing the housing needs of families 
with children and youth leaving the care of the child welfare system. 

Ms. Fitzpatrick's evidence is that annually, the CASMT works with over 8,500 
families and 18,500 children a year. Of the household population that CASMT 
provides service to, 56% of CASMT's clients are single parent, primarily female 
headed. 27% of the families served, and one in four children in care, are members of 



28 



racial and ethnic minorities, many of whom are new immigrants or refugees. 56% of 
families receive some form of social assistance. The vast majority of CASMT clients 
are tenants. 

Ms. Fitzpatrick quoted a statistic from Canada Mortgage and Housing 
Corporation that in 1990, the average income of single parents in core need was 
$14,200 and this group had an average rent to income ratio of 47%. 

CASMT attempts to prepare youth in care who are wards of the Society for 
future independence, including access to safe and adequate housing. $663 a month 
(prior to November 1994, the independence allowance was $567/month) is provided 
by CASMT to youth on independent living programs (living independently in the 
community). Youth most often access housing such as rooming houses, shared 
apartments with friends/ family members, shelters, independent living group homes, 
and apartments in houses (e.g. basement apartments). CASMT allows youth to spend 
up to 70% of their allowance on rent. 

Ms. Fitzpatrick described the needs of families and the importance of 
optimizing the choice of housing available to meet those needs. The needs include the 
size of housing, adequacy of space, location, proximity to friends, family, support 
people, schools, and community. Ms. Fitzpatrick outlined some of the difficulties 
experienced by CASMT clients in renting apartments. Income criteria were a major 
factor in clients' difficulties in renting stable and safe housing although Ms. 
Fitzpatrick acknowledged that income criteria are not uniformly applied by landlords. 

Ms. Fitzpatrick also gave evidence concerning the impact on clients who have 
been refused rental accommodation of their choice. Families having to share 
accommodation with friends or relatives, parents sleeping in the same room or same 
bed as their children, increased noise and over-crowding - all these conditions lead to 
increased stress and health problems. 

Youth experience different problems than families in securing safe and stable 
housing. A co-signer or credit check is often required in addition to consideration of 
income criteria. Co-signers may be difficult to obtain in that the youth may have left 
home because of an abusive situation. Young persons may not have credit and are 
therefore unable to meet the credit check requirement. The inability to secure 



29 



housing can have detrimental effects on youth which may range from homelessness to 
physical and mental health risks to the extremes of prostitution, malnutrition, or 
manic/ aggressive anti-social behaviours. 

Barry Lyon and Gary Mcllravey 

Messrs. Lyon and Mcllravey testified as a panel. They were both qualified as 
experts in residential market analysis, and gave evidence on the impact of rent 
arrears on the viability of residential landlords' business at the hearing and in their 
report, "The Impact of Rent Arrears on the Viability of Residential Landlord's 
Businesses." The report assesses the degree to which tenant default effects the 
viability of operating a typical rental business. Mr. Mcllravey testified that he was not 
aware of any studies or data that had established a link between default rates and 
rent-to-income ratios. 

The first part of the report described the nature of the rental business: the 
kinds of landlords, the demand environment for rental housing, the typical level of 
vacancy and how it was changed over time. The next part of the report dealt with how 
a rental business is typically evaluated, and determined to be viable or not. It 
compared the typical costs of doing business and the revenues achieved. The report 
reviews various sources to determine what the likely extent of tenant default is and 
how that affects the viability of the business. 

Messrs. Lyon and Mcllravey concluded that the risk of tenant default is an 
insignificant factor in determining the viability of a residential rental business. They 
found that bad debt normally makes up less than 1% of gross revenue, including 
retail and wholesale businesses. They were of the opinion that there is no reason to 
suggest a greater risk of bad debt in the residential rental apartment business, than 
in others. 

They considered the effect of a typical level of bad debt on profitability and on 
return on investment and found that the effect was relatively insignificant. Further, 
they testified that eliminating an average level of bad debt altogether would only 
increase the rate of return by about one tenth of one percent. Similarly, they found 



30 



that doubling the average level of bad debt would only reduce the rate of return by 
one-tenth of one percent. A minor fluctuation in property tax rates, mortgage rates, 
or an unexpected repair bill, pose equal and potentially more serious risks for 
landlords than the risk of increased tenant default, in their view. 

Messrs. Lyon and Mcllravey were of the opinion that rental businesses fail 
because the investor has paid more than the income can support or has failed to 
budget for necessary repairs, or has accepted a capitalization rate that is too low 
because of unrealistic expectations of equity appreciation. They concluded that 
tenant default on rent is not a significant cause of business failure in the residential 
rental business. 

Messrs. Lyon and Mcllravey surveyed landlords who advertised apartments in 
the Renters' News and found that only 28% of landlords surveyed use minimum 
income qualifications. They found that the practice of using income criteria is most 
frequent among large property managers and least frequent among those landlords 
who are most vulnerable to tenant default - the small "mom and pop" landlords. 

It was their evidence that there is no reference to the use of income criteria in a 
widely used "Property Manager's Handbook" distributed by the Property Management 
Training Association. They were also of the opinion that there is no study showing 
any relation between rent to income ratios and default on rent. They agreed with the 
evidence of Dr. Hulchanski that the use of minimum income criteria to screen tenants 
seems to have evolved from commonly held prejudices without empirical research on 
which to base these practices. 

The data analyzed by Messrs. Lyon and Mcllravey shows that tenant default is 
not a significant factor in determining the viability of a landlord's business. The 
average impact of default is 0.5% of gross income in larger buildings. They were of 
the opinion that with vacancy rates in the range of 1.8%, the cost of vacancies to 
landlords is a more significant factor. 

The Board was persuaded by Messrs. Lyon's and Mcllravey's conclusions that: 

Consequently, restricting applicants to apartment buildings on the basis 
of income in the hopes of reducing default, may be counter-productive to 
the landlord. In fact, this practice potentially creates additional costs to 



the landlord, by restricting demand and increasing vacancy, rather than 
creating any significant savings in the area of bad debts. 

The Evidence of the Respondents' Experts 

The respondents also called a number of expert witnesses to give evidence, 
which we will refer to as needed in our reasons for our decision. After careful review 
of the respondents' evidence we have decided that the respondents produced no 
evidence that the use of income criteria to screen tenants is a reliable predictor of 
default or the ability to pay rent. Furthermore, the respondents did not tender any 
evidence to support a finding that if landlords were not permitted to use income 
criteria to screen prospective tenants that they would suffer undue hardship. 



DECISION 



In making its decision, the Board was mindful that the Supreme Court of 

Canada has consistently held that the proper interpretation of human rights 

legislation requires a broad, liberal, purposive approach. Most recently in Gibbs v. 

Battlefords and District Co-operative Ltd, [1996] 3 S.C.R. 566 (S.C.C.), Sopinka J., 

citing earlier decisions, wrote as follows: 

This court has consistently held that human rights legislation is 
"fundamental" or "quasi-constitutional" and as such should be 
interpreted in a broad and purposive manner. As Lamer J. (as he then 
was) stated in Insurance Corporation of British Columbia v. Heerspink, 
[1982] 2 S.C.R. 145, at pp. 157-58: 

When the subject matter of a law is said to be the comprehensive 
statement of the "human rights" of the people living in that 
jurisdiction, then there is no doubt in my mind that the people of 
that jurisdiction have through their legislature clearly indicated 
that they consider that law, and the values it endeavours to 
buttress and protect, are, save their constitutional laws, more 
important than all others. 

Sopinka J. also cited Zurich Insurance Co. v. Ontario (Human Rights Commission), 

[1992] 2 S.C.R. 321: 



32 



Human rights legislation is amongst the most pre-eminent category of 
legislation ... One of the reasons such legislation has been so described 
is that it is often the final refuge of the disadvantaged and the 
disenfranchised. As the last protection of the most vulnerable members 
of society, exceptions to such legislation should be narrowly construed 

The meaning of the term "discrimination" was considered by the Supreme Court 

in Canadian National Railway Co. v. Canada (Canadian Human Rights Commission) 

[1987], 8 C.H.R.R. D/4210 (S.C.C.) at D/4227. The Court referred to the Abella 

Report, and the essential elements of systemic discrimination: 

Discrimination... means practices or attitudes that have, whether by 
design or impact, the effect of limiting an individual's or a groups right 
to the opportunities generally available because of attributed rather than 
actual characteristics... 

It is not a question of whether this discrimination is motivated by an 
intentional desire to obstruct someone's potential, or whether it is the 
accidental by-product of innocently motivated practices of systems. If 
the barrier is affecting certain groups in a disproportionately negative 
way, it is a signal that the practices that lead to this adverse impact may 
be discriminatory. This is why it is important to look at the results of a 
system. 

Whether a case is one of direct or constructive discrimination, the burden of 
proof in all cases is the same. It is well established that it is the civil standard, a 
balance of probabilities [Ontario Human Rights Commission v. Borough of Etobicoke 
[1982], 3 C.H.R.R. D/781 (S.C.C). Further, in human rights cases, the burden of 
proof to establish a prima facie case rests with the Commission and the complainants 
[Ontario Human Rights Commission v. Borough of Etobicoke, supra; Ontario Human 
Rights Commission and O'Malley v. Simpsons-Sears Ltd., [1985] 2 S.C.R. 536). 

A prima facie case is one which supports or proves the allegations made and 
which, if the allegations were believed, is sufficient to justify a decision in the 
complainant's favour in the absence of a response from the respondent. This applies 
to both direct and to adverse effect discrimination. The elements of a prima facie case 
of constructive discrimination are determined by the words of Section 1 1 of the Code. 
The components of a prima facie case as set out in Keene, Human Rights in Ontario, 



33 



2nd ed., Carswell at p. 126, were adopted in Thome v. Emerson Electric Canada Ltd. 
(1993), 18 C.H.R.R. D/510 (Ont. Bd. of Inq.) at 513-514: 

(a) Existence of the Factor - that the landlord uses a rent/income ratio or 
income criterion as a factor in assessing applications; that the use of such a 
factor is a "requirement, qualification or factor" as those words appear in 
Section 11 of the Code. 

(b) Effect of the Factor - that using the factor results in the "exclusion, 
restriction or preference of a group of persons who are identified by a 
prohibited ground of discrimination." 

(c) Membership in the Protected Group - that the complainant (the applicant 
for tenancy with that particular landlord) is a member of the group (or 
groups if applicable) referred to in clause (b) above. 

In considering the second component above - the effect of the requirement, 
qualification or factor - it is clear that the Commission and the complainants need not 
prove that the factor excludes all people in the particular group. There is no 
requirement to prove that all members of a group share a particular characteristic. In 
Sehdev v. Bayview Glen Junior Schools Ltd. (1988), 9 C.H.R.R. D/4881 (Ont. Bd. of 
Inq.), constructive discrimination was established, even though the rule in question - 
a dress code that prohibited headwear - did not affect every Sikh or every Jew. A 
neutral rule in Janssen v. Ontario (Milk Marketing Board) (1990), 13 C.H.R.R. D/397 
(Ont. Bd. of Inq.) was found to constitute adverse effect discrimination even though it 
did not equally affect every member of a particular faith. 

Cases of direct discrimination do not require a finding that all people bearing 

the relevant characteristic be discriminated against. The Supreme Court made this 

point again in Gibbs, as follows: 

The case law has consistently held that it is not fatal to a finding of 
discrimination based upon a prohibited ground that not all persons 
bearing the relevant characteristic have been discriminated against. 

It would be illogical and contrary to the principles of statutory interpretation to have 

different standards for the "scope of the effect" of discrimination that depend on 

whether the discrimination was direct or constructive. 



34 



Catarina Luis v. Creccal Investments Ltd. ("Creccal") 

a) The Existence of the Factor 

As noted earlier in our findings of fact, Ms. Luis' evidence was that she went to 
The Crossways, owned by Creccal, to inquire about an apartment she had seen 
advertised. When she was asked how much she made, Ms. Luis replied that she 
made between $1,500 and $1,600 a month. Creccal's representative, Ms. Gravelle, 
said that it was not enough and that it was Creccal's policy that she had to make 
$2,000 a month to qualify for an apartment. When Ms. Luis pointed out what she 
was paying at her present apartment, Ms. Gravelle said that it did not matter. 

Ms. Gravelle testified that she had no recollection of meeting Ms. Luis. 
However, on the day that Ms. Luis looked for an apartment, the policy was that to 
qualify for a bachelor, the applicant needed an annual income of $ 22,000. Creccal 
does not run credit checks on people who do not meet the income criteria. 

Mr. Di Geso, the manager of The Crossways, testified that in 1990 Creccal used 
income criteria. He said that if an applicant was making $17,000 per year, The 
Crossways would explain that the applicant could not afford the apartment. Since 
Creccal required $22,000 per year for a bachelor apartment, an applicant making 
$17,000, $18,000 or $19,000 per year did not meet the income criteria. Creccal 
would not put the applicant on a waiting list if the income criteria was not met. 

The evidence establishes that Creccal was using an income criterion when Ms. 
Luis applied for an apartment in 1990. To get a bachelor apartment, one needed an 
annual income of $22,000. Whether the criterion is expressed as a ratio or as an 
annual income determined after the landlord has made calculations, the result is the 
same. 

b) The Effect of the Factor 

Ms. Luis' complaint cites a number of grounds protected under the Code. The 
effect of a landlord's use of a rent/income ratio on people in receipt of public 
assistance is most telling. 



35 



i) Receipt of Public Assistance 

Ms. Gravelle testified that in 1990, no one on social assistance would qualify 
for The Crossways' bachelor apartments. She testified that the "income criteria used 
at The Crossways would mean that no one on social assistance would qualify for a 
bachelor apartment." Mr. Stapleton testified that social assistance recipients spend 
an inordinate amount of their income on rent — the average recipient spends about 
50% of his/her income. Income criteria tend to exclude people in receipt of social 
assistance. Mr. Pala testified that if a landlord used a threshold of $22,000 as 
annual income, no sole support parent with a child under the age of nine receiving 
social assistance benefits would qualify. If landlords used a 30% rent/income ratio, 
over 90% of people receiving general welfare assistance would not qualify; over 88% of 
people receiving family benefits assistance would not qualify. 

Dr. Hulchanski's evidence was consistent in pointing out the severe effect of 
the use of rent/income ratios upon social assistance recipients. The application of 
rent/income ratios has a significant effect on households receiving public assistance. 
All households receiving the maximum housing allowance - either under GWA or FBA 
- would fail a 30% rent/income test. All households receiving the maximum housing 
allowance under FBA would fail a 40% rent/ income test, while all households 
receiving a maximum allowance under GWA would fail a 50% rent/ income test. 

There is ample evidence, including evidence of the respondent's own witness, to 
support the finding that Creccal's income criteria excluded all recipients of social 
assistance from The Crossways. 

ii) Sex, Marital Status, Family Status, Race, Citizenship, Place of Origin 

The evidence was also clear that the use of rent/income ratios by landlords has 
a disparate impact on a number of other protected groups. Dr. Ornstein's analysis 
which included groups categorized by sex, family status, marital status, race and 
citizenship, noted that in some instances, it is important to recognize that many 
"groups" intersect and overlap substantially. For example, he emphasized that 90% 
of lone parents are women, so that the effect of a policy on lone parents cannot be 
isolated from its effect on women. Dr. Omstein was able to identify general trends 



36 



from his statistical analysis: unattached people and female lone parents have a high 
incidence of low income and are affected significantly by the use of rent/income ratios 
by landlords. 

Evidence of Dr. Leddy was that the source of income for most refugees is 
welfare, and most refugees pay about 50% of their income toward rent. 

The effect of Creccal's policy on Ms. Luis is also important to note. In 
December 1990, Ms. Luis moved into a different apartment and paid more in rent 
than she would have had to pay at The Crossways. The apartment was less desirable 
in terms of its location, its amenities, and its cleanliness. 

c) Membership in the Group(s) 

When Ms. Luis applied at The Crossways, she was clearly a member of the 
groups identified by race, sex, marital status, family status, citizenship, place of 
origin, and receipt of public assistance. The evidence shows that Ms. Luis, at the time 
of applying at The Crossways, was a single black woman with a young daughter, a 
refugee from Angola, and in receipt of family benefits assistance. 

The Board concludes that all the components of the prima facie case are 
established against the respondent Creccal. Creccal's practice of using income 
criterion to screen tenants constitutes prima facie constructive discrimination on the 
basis of every ground cited in Ms. Luis' complaint. 

J.L. v. Shelter Corporation of Canada Limited ("Shelter") 

a) The Existence of the Factor 

J. L. and Marta Dickinson applied for an apartment at Aquitaine Shores, 

owned by Shelter. The rent was $906 per month. During their application process, 

they were asked their ages by the rental agent and the application required that they 

disclose their annual income. Ms. Dickinson testified that two days after delivering 

the cheques for first and last months' rent: 

... the property manager told me that we didn't qualify for the apartment, 
and she gave me back my application... and she told me that we weren't 
making enough money because we both had to be making enough to 



cover the month's rent... and she said specifically that we had to be 
making over $32,000 a year each. 

The application forms were returned, along with the two cheques and written on the 

face of the rejected application was: "declined - insufficient income + no credit 

reference June 6/90." 

No evidence was called to contradict Ms. Dickinson's evidence that the figure 
mentioned by the rental agent was $32,000 per year, and that each applicant had to 
qualify. An income requirement of $32,000 for an apartment renting at $906 per 
month amounts to a rent/income ratio of 33.973%. 

Further, Shelter's response to the complaint stated "It is our company's policy 

that any applicant for tenancy meet our income criteria." 

In accordance with Shelter policy, the total amount of rent and utilities 
to be paid by the applicant should not exceed thirty percent (30%). 

Mr. Gonsalves, an employee of Shelter, testified that Shelter's rent/income ratio was 

in the range of 30% to 33.33% in June 1990. Mr. Gonsalves also testified that in 

June 1990, Shelter allowed couples to combine their incomes for the purpose of 

calculating the rent/income ratio, but did not permit two single people to do so. 

The evidence establishes that Shelter was using a rent/income ratio in 

assessing applications, and that in June 1990, the application of J. L. was rejected, 

either in whole or in part, because her income level, and that of her co-applicant Ms. 

Dickenson, did not meet the criterion. 

b) The Effect of the Factor 

There is clear evidence that the impact of rent/income ratios on young 
unattached women is significant. In Dr. Ornstein's statistical analysis he noted that 
68% of unattached women under the age of 20 have less than $10,000 in income. He 
concluded in his report that "young people are the hardest hit by income criteria... 
Young, unattached persons are virtually excluded from accommodation limited by 
income criteria." Dr. Ornstein concluded further: "Thus, young women are virtually 
excluded from Aquitaine Shores." 



38 



c) Membership in the Group(s) 

At the time J.L. applied at The Crossways she was a 16 year-old woman, a 
member of the groups identified by "age" and by "sex." 

The Board concludes that all the components of the prima facie case are all 
established against the respondent Shelter. Shelter's practice of using minimum 
income criterion to screen tenants constitutes prima facie constructive discrimination 
against J. L. on the basis of age and sex. 

Dawn Kearney v. Bramalea Inc. ("Bramalea") 

a) The Existence of the Factor 

The evidence establishes that Bramalea used a rent/ income ratio as part of its 

procedure in assessing applicants for tenancy and did so in assessing Ms. Kearney's 

application. Bramalea adduced no viva voce evidence as to its practice. However, 

Bramalea itself identified and referred to the practice of using rent/ income ratio in the 

response to Ms. Kearney's complaint, as follows: 

My clients (referring to Bramalea) informed the complainant that in order 
to occupy an apartment with Bramalea Ltd., any and all applicants must 
be able to demonstrate an "on-going" ability to pay the monthly rental 
fees. As such, Bramalea Ltd. had established a policy whereby all 
applicants must be able to demonstrate that their total income would 
meet a guideline of 25% (or less) of total salary which can be paid 
towards rent. 

Furthermore, such a criteria is established uniformly and universally 
for all applicants to Bramalea. 

Ms. Kearney and her husband applied to Bramalea for an apartment in 
September 1988. Ms. Kearney was pregnant and the couple were seeking a two- 
bedroom apartment, in the range of $600 monthly rent. The Kearneys told the 
Bramalea representative their income, and were advised by the Bramalea 
representative that they had to make $30,000 a year in order to qualify for an 
apartment. 



39 



b) The Effect of the Factor 

The evidence also supports a finding that the impact of Bramalea's use of a 
rent/income ratio has a disproportionate effect upon young people. Dr. Omstein's 
evidence, particularly the statistical evidence with respect to age and income in the 
Toronto CMA, and his comparisons between Toronto and Brampton show that the 
impact was substantial. 

Ms. Callaghan testified as to the effect of landlords' use of rent/income ratios 
on pregnant and parenting teenagers. She indicated that the most common 
percentage encountered as a landlord's ratio is 30%. She stated that the families that 
are relying on social assistance, and even those who are working who tend to be in 
the lower end of paying jobs, are excluded by this ratio. 

The effect of the use of the criterion upon Ms. Kearney was that she and her 
husband continued to live with her husband's parents in a crowded apartment. There 
was very little privacy, and tension was increased. The Kearneys, together with one 
child, shared an extremely small room. 

c) Membership in the Group(s) 

The evidence is clear that Ms. Kearney was 17 years old at the time that she 
and her husband, who was then 18, searched for an apartment in September 1988. 
She was pregnant. They were thus both members of the group identified as "young" 
in the analysis carried out by Dr. Ornstein. Further, as a pregnant woman, Ms. 
Kearney also came within the group of persons identified by "sex." 

The Board concludes that all the components of a prima facie case are 
established against the respondent, Bramalea. Bramalea's use of an rent/income 
ratio constitutes prima facie constructive discrimination against Ms. Kearney, on the 
basis of age and sex. 

The Effect of the Landlords' Decisions 

In addition to the evidence pertaining to the specific complainants, the 
Commission submitted that the evidence before the Board also shows that the 



40 



exclusion of people from accommodation, by landlords' use of rent/income ratios or 
income criteria, results in the following: people are forced to live farther away from 
friends and family, from employment, and from schools or child care; the income 
criteria reduce the stock of apartments for the search; youth wind up in housing that 
is not as desirable and may be more dangerous, or involve greater problems of 
hygiene; the more established landlords use the criteria. 

The Board finds that Dr. Ornstein's extensive analysis of the census and other 
surveys is clear evidence that income criteria differentially affect groups protected by 
the Code — groups defined on the basis of sex, marital and family status, age, 
citizenship, race, immigration status, place of origin, and being in receipt of public 
assistance. The result is to significantly restrict the housing choice of protected 
groups whose members often end up in higher priced accommodation of poorer 
quality. 

The Commission submitted that whether a landlord used a rent/income ratio 
or a minimum income criterion is immaterial. We agree. Minimum income criteria 
are set according to the rent of a particular unit, and are merely the landlord's 
expression of the calculations following the use of a rent/income ratio. In all three 
cases, the evidence shows the use of a rent/income ratio. In all three cases, the 
applicants were advised of the minimum income required by application of the 
rent/ income ratio. 

It is well established that if a decision is made for a number of reasons, one of 
which is prohibited by the Code, then the whole decision is tainted. Proving that one 
of the factors for a decision is prohibited by the Code is sufficient to prove that a 
breach of the Code is a proximate cause of the decision. When Shelter rejected the 
application of J.L. for two reasons - for not meeting the income criteria and having no 
credit history - and one of the reasons constitutes a prima facie breach of the Code, 
then the evidence discloses a prima facie breach of the Code. 
Section 11 Defence 

Once a prima facie case of constructive or adverse effect discrimination is 
established by the Commission and the complainants, the respondents must 



41 



establish a defence on a balance of probabilities. As noted earlier in the decision, it is 

well established that the interpretation of human rights legislation should be broad 

and purposive. However, the interpretation of defences, where available, is to be 

construed strictly. In Zurich Insurance, the Supreme Court of Canada held that: 

A logical corollary to this purposive approach is the narrow 
interpretation of exceptions within human rights legislation. Defences to 
discrimination under the Code must be narrowly construed so that the 
larger objects of the Code are not frustrated. 

A successful defence under Section 1 1 of the Code must prove three elements - 
reasonableness, bona fides, and undue hardship. Section 11 provides as follows: 

(1) A right of a person under Part I is infringed where a requirement, 
qualification or factor exists that is not discrimination on a prohibited 
ground but that results in the exclusion, restriction or preference of a 
group of persons who are identified by a prohibited ground of 
discrimination and of whom the person is a member, except where, 

(a) the requirement, qualification or factor is reasonable and bona 
fide in the circumstances; or 

(b) it is declared in this Act, other than in section 17, that to 
discriminate because of such ground is not an infringement of ■ 
a right. 

(2) The Commission, the board of inquiry or a court shall not find that a 
requirement, qualification or factor is reasonable and bona fide in the 
circumstances unless it is satisfied that the needs of the group of which 
the person is a member cannot be accommodated without undue 
hardship on the person responsible for accommodating those needs, 
considering the cost, outside sources of funding, if any, and health and 
safety requirements, if any. 

Counsel for the complainants argued that in order for the respondents to prove 
that using income criteria to screen tenants is reasonable and bona fide, the 
respondents must meet both a subjective and objective test as required in O'Malley, 
supra. The respondents must show 1) that the rule was honestly made for sound 
economic reasons, and out of a genuine belief in its business necessity, and 2) that 
the rule was equally applicable to all to whom it was intended to apply in order to 
satisfy the subjective test. The objective test requires that in order for the rule to be 



42 



found reasonable it, in fact, fulfills a genuine business need and is rationally 

connected to a genuine business purpose. 

Counsel argued that the evidence was clear that the respondents had adopted 

and used the rule without any prior evaluation of its ability to measure or predict 

default. She argued that this was one of the reasons in Griggs that the United States 

Supreme Court held that a requirement for a high school diploma and a general 

intelligence test were not related to job performance. The court held: 

Both were adopted... without meaningful study of their relationship to 
job performance ability. Rather, a vice-president of the company 
testified, the requirements were instituted on the company's judgment 
that they generally would improve the overall quality of the workforce 
(Griggs v. Duke Power Company [1971], 401 U.S. 424). 

Thus counsel argued that the respondents here cannot demonstrate that the rule is 

rationally connected to a business necessity unless they demonstrate that the income 

criteria are predictive of tenant default. 

Counsel argued further that under Section 1 1 of the Code the respondents 

must also show that individuals adversely affected by the rule cannot be 

accommodated without undue hardship, "considering cost, outside sources of 

funding, if any, and health and safety requirements, if any." Counsel argued that 

when Section 11 was added to Ontario's Code, while it established a similar provision 

as in the O'Malley decision, it is also clear from the legislative history that it is 

different. She argued that Section 1 1 incorporates a more rigorous standard and a 

more limited list of defences than in O'Malley. She noted that while the O'Malley 

decision refers to accommodating "the complainant," Section 1 1 refers to 

accommodating the "needs of the group of which the person is a member." Counsel 

argued that the legislative history of Section 1 1 provides specific factors that can be 

considered when assessing undue hardship and that it has been held that boards 

may not consider other factors. Counsel cited Quesnel v. Eidt (1995), unreported 

(Ont. Bd. of Inq.). 

a) Reasonableness 

Clause 11 (1) (a) of the Code requires that the respondents prove first, on a 
balance of probabilities, that their use of rent-to-income ratios is reasonable. In order 



to do this, the landlords must show that there is a rational, objective basis for using 
such a discriminatory criterion. The landlords must prove that there is a rational 
connection between their use of a rent-to-income ratio, and the landlords' business 
objective of minimizing instances of default. That is, the landlords must show that 
their use of rent-to-income ratios reduces the landlords' incidence of default. 

Having carefully considered the evidence of the respondents, we find that there 
is no evidence to show that the use of a rent-to-income ratio reduces a landlord's 
incidence of default. On the contrary, there is considerable reliable evidence that 
shows that there is no relationship between a tenant's rent-to-income ratio at the time 
of entry into the landlord/ tenant relationship, and the probability of default by that 
tenant at some future point. In the absence of evidence connecting rent-to-income 
ratios with default, the Board does not have to consider whether the respondents have 
satisfied the burden of proof. It is not an issue. 

The history of the "rule" shows that it is not based upon empirical data. There 
is no relationship between the percentage of income that a person spends on rent and 
the probability that such person will default in the payment of rental obligations. The 
rule has its roots in the 19 th century studies of how households budgeted their 
resources and in the commonly used expression "one week's pay for one month's 
rent." By the late 19 th century, a week's wage for a month's rent was widely used for 
referring to the housing expenditures of some tenants. This continued into the 20 th 
century, changing upward to 20%, 25% or 30% as somehow representing the upper 
limit of what households could afford to pay for housing. We are persuaded by the 
evidence of Dr. Hulchanski (summarized more fully above) that the rule is based on 
little more than assumptions about what average households tend to spend and/ or 
beliefs about what they ought to spend on housing. 

Dr. Hulchanski's evidence identified six contemporary uses of the rent-to- 
income ratio, and classified them as (1) description, (2) analysis, (3) administration, 
(4) definition, (5) prediction, and (6) selection. The latter three uses, defining "need" 
for policy purposes, using rent-to-income ratios to predict whether tenants will 
default, and using rent-to-income ratios for selection of tenants, are all improper. The 
use of the income criteria for these purposes leads to invalid and unreliable results. 



44 



Using income criteria for defining need, predicting default, and selecting tenants is 
invalid because it fails to measure what it claims to be measuring, even if the 
research methods and the statistical analysis techniques are properly carried out. 

Using income criteria to predict default is specifically analyzed and rejected as 
invalid by Dr. Hulchanski. It was his opinion that there is no evidence that the ratio 
of housing expenditure-to-income is a valid and reliable measure of ability to pay 
rent. Since households may respond differently, and yet effectively, to changing 
circumstances, imposing the same standard for all households is unrealistic. A 
maximum rent-to-income ratio for one household may not be appropriate for another. 

Dr. Hulchanski's evidence was that households meet their needs through a 
variety of methods. The rent-to-income ratio, by using only formal money income, 
fails to recognize that households use far more than the formal economy in meeting 
needs; the ratio ignores other sources of support. The inadequacy of the measure of 
"income" used in the income criterion is itself a ground for rejecting the use of the 
criterion. Further, there is no evidence to support its use as a measure of ability to 
pay for housing. There is substantial evidence to the contrary - evidence that many 
households are paying much more than the prescribed ratio. The reality of how 
households manage to meet their needs, including the need to have the cash to pay 
their rent, is too complex and diverse to be summarized in one simple measure. 

Also, the evidence relating to the rental market shows that the rent-to-income 
ratio is not a predictor of the probability of default. For example, Dr. Hulchanski 
points out in his Background Paper number 2 that in Ontario (1991 data), some 
830,000 renters and owners, (about 23% of Ontario households), should be 
defaulting on their mortgage and rent payments if the ratio of 30% were a valid 
predictor of default. There is simply no evidence that default rates come anywhere 
close to those levels. 

Further, it is clear from the evidence presented by Dr. Hulchanski that a 
landlord's use of a rent-to-income ratio in tenant selection does not help predict (a) 
whether a tenant will pay rent as it becomes due, (b) whether a tenant will be able to 
pay rent as it becomes due, and (c) whether a tenant will be willing to pay rent as it 
becomes due. The academic literature cited by Dr. Hulchinski on the topic of the use 



45 



of a rent-to-income ratio in housing is that use of a ratio has no value in predicting 
the likelihood of default. 

The evidence supports a conclusion that it is unexpected changes in one's 
circumstances after entering into a tenancy which are the most common cause of a 
tenant's default. 

Most importantly, the evidence establishes that the practices of the landlords in 
using income criteria is not reasonable. Bramalea admits in the response to the 
complaint of Ms. Kearney that it used a 25% rent-to-income ratio. However, no 
evidence was called as to why Bramalea used a rent-to-income ratio, or why a 
particular ratio was adopted. Thus, the only possible conclusion for this Board is 
that there is "no evidence that Bramalea used a specific rent-to-income ratio in its 
tenant selection process because the 25% ratio had any predictive value in indicating 
whether a tenant would default in the payment of rental obligations as they become 
due." 

Testifying for Shelter, Mr. Gonsalves indicated that Shelter used a rent-to- 
income ratio of "one-third" and Shelter's written policies show that the rent-to-income 
ratio to be applied was 30%. However, Mr. Gonsalves gave no evidence that Shelter 
used a rent-to-income ratio because it had any predictive value in determining 
whether a tenant would pay rent in a timely way or because it had predictive value in 
indicating whether a tenant would default. 

Creccal's evidence as to the use of a rent-to-income ratio came from Mr. Di 
Geso who said Creccal used the industry standard of 30% as an income criterion. 
The evidence shows that Creccal first used an income criterion of $22,000, annual 
income requirement, based upon an annual rent of $6,000, (a rent-to-income ratio of 
27%), and continued to use the income criterion of $22,000 even when average rents 
had risen to $7,800 (a rent-to-income ratio of 34%). The evidence was that over a 
period of a few years, Creccal moved its rent-to-income ratio from 27% to 34% and 
did so with no effect upon its default rate. 

Mr. Di Geso also indicated in evidence that his application of the income 
criterion changed for tenants in receipt of public assistance. For tenants in receipt of 
public assistance he would agree to the tenancy provided that the amount of rent did 



46 



not exceed the person's shelter allowance as set out in the rates for public assistance 
benefits. Thus he would rent an apartment to a single mother, in receipt of public 
assistance, even though the rent-to-income ratio would exceed 50% of benefits. Mr. 
Di Geso testified that he would be able to rent an apartment since "it's guaranteed 
she's getting that $585 to pay as rent." There was no evidence from Mr. Di Geso that 
by agreeing to take tenants whose rent would exceed 50% of income there was an 
effect upon the default rates in Creccal's apartments. 

The evidence of the three landlords shows that they used various rent-to- 
income ratios - 25%, 27%, 30%, 33 1/3%, 34%. However, there is no empirical 
evidence that any of the ratios was picked because it had any predictive value with 
respect to the issue of whether a tenant would default in the payment of rent. The 
landlords were simply using "numbers" which had their historic bases as clearly 
outlined in the evidence of Dr. Hulchanski. The landlords were not using rent-to- 
income ratios because there was an objective rational basis for so doing. 

The evidence tendered by the respondents fails to show a connection between a 
rent-to-income ratio and the risk of default. The respondents did not submit 
empirical evidence comparing the default experiences of landlords who use rent-to- 
income ratios and those who do not. The respondents' own witnesses, Professors 
Trebilcock and Halpern, stated that they advised the respondents that empirical work 
was needed; in fact, they insisted that it be done. Professors Trebilcock and Halpern 
indicated that they themselves had carried out no empirical studies comparing the 
default experiences of landlords who use rent-to-income ratios and those who do not. 
But their opinions rested on the premise that income criteria were predictive of 
default. 

The only empirical evidence tendered by the landlords, in an attempt to show 
that the use of a rent-to-income ratio by a landlord is "reasonable," comes in the form 
of an analysis carried out by Mr. Earwaker. Mr. Penner's report relied on this 
statistical analysis. Professors Trebilcock and Halpern also relied upon Mr. 
Earwaker's analysis for the proposition that the use of a rent-to-income ratio reduces 
the risk of default. Similarly, Mr. Lampert, who was retained to give evidence on 
behalf of the landlords, acknowledged that he did not do a survey of landlords who 



47 



use rent-to-income ratios in comparison to those who do not, and relied on Mr. 
Earwaker's and Mr. Penner's analysis. 

Mr. Earwaker, a statistician, was approached by Mr. Penner to analyse data 
from the two respondents Bramalea and Shelter. Mr. Earwaker testified that he 
compared three groups - defaulting tenants, delinquent tenants, and non- 
delinquent/non-faulting tenants. Mr. Earwaker's analysis compares the average rent- 
to-income ratios of those three groups. The question posed by Mr. Earwaker was: 
what are the average rent-to-income ratios of the three groups - defaulting tenants, 
delinquent tenants, and non-defaulting/non-delinquent tenants? 

However, the question as posed by Mr. Earwaker has no bearing on the 
essential issue to be addressed in this case: does using a rent-to-income ratio in 
tenant screening and selection reduce a landlord's risk of default? Mr. Earwaker 
acknowledged that he did not test the hypothesis that a landlord's use of a 30% rent- 
to-income ratio will reduce that landlord's default experience. Mr. Earwaker admitted 
in cross-examination that that question would require "a different test." Mr. Earwaker 
also acknowledged that there is no direct translation between what he did - analysing 
average rent-to-income ratios - and analysing the risk to landlords. 

The evidence of Dr. Ornstein, given in reply, explains the fundamental error in 

Mr. Earwaker's formulation of his expert report: 

To conduct analysis bearing directly on the efficacy of income criteria, it 
is only necessary to compare the default rates of tenants with rent-to- 
income ratios above and below the specific income criteria employed by 
the respondents. This Mr. Earwaker did not do. Instead, he chose to 
compare the average rent-to-income ratios of the non-defaulting non- 
delinquent, delinquent and defaulting tenants and as noted above, did 
not do so correctly. 

It seems likely that if defaulters have a higher mean rent-to-income 
ratio than non-defaulters, then landlords' use of a specific criterion will 
lower the number of defaults. Differences in the average rent-to-income 
ratios of the three groups, however, cannot be translated into a test of 
the efficacy of any particular income cut-off in the determination of the 
eligibility for accommodation. We cannot assume that the effects of 
different criteria are "linear." For example, showing that a 35% criterion 
decreases the likelihood of default would not necessarily mean that a 
30% criterion would decrease the likelihood still more and a 25% 
criterion even further. Mr. Earwaker could have designed his study to 



48 



analyse the impact of the specific income criteria used by the 
respondents, but did not. 

Dr. Ornstein emphasized in his evidence in reply that the design of a relevant study 

should reflect the research question. However, Mr. Earwaker's does not and therefore 

his analysis does not support a finding that the rent-to-income ratio helps predict 

default. Dr. Ornstein emphasised that in Mr. Earwaker's work, there is no analysis of 

whether the use of any particular ratio affects the risk of default. There were also 

critical errors in the methodology. 

The Board agrees with Dr. Ornstein 's opinion that Mr. Earwaker's research was 

fundamentally flawed, and the analysis does not address the question of the efficacy 

of rent-to-income rations as predictors of default. It is, therefore, of no assistance to 

the Board. 

It is the Board's conclusion that the practice of using a rent-to-income ratio is 
reasonable only if the use of such a ratio reduces a landlord's risk that tenants will 
default in the payment of rental obligations. The evidence presented by the 
respondents fails to show any connection between landlords' use of rent-to-income 
ratios and the reduction of the risk of default. Therefore, the landlords have failed to 
show that their use of rent-to-income ratios is related to a genuine business need. 
Consequently, the respondents have failed to prove a necessary component of the 
defence required under clause 11 (1) (a) of the Code. 

b) Bona Fides 

The respondents also failed to establish with evidence that the use of rent-to- 
income criteria is bona fides, an element of a defence under clause 11 (1) (a). The 
jurisprudence on bona fides is found in mandatory retirement cases such as 
Etobicoke, supra, and Large v. Stratford. In those cases, the Supreme Court held that 
a bona fide qualification had both a subjective and an objective component. 
"Reasonableness" was not included in the statutory provision considered by the 
courts, since the predecessor of clause 24(l)(b) considered in these cases, dealt only 
with whether the requirement was bona fide. The objective component from the 
earlier cases is reflected in the incorporation of "reasonableness" into clause 11 (1) (a). 
Thus, the required component of bona fides, as it appears in Section 11, can be 

49 



analyzed from the jurisprudence on the subjective component of bona fides in those 
earlier cases. In Etobicoke, Mclntyre J. defined the subjective arm of the test as 
follows: 

To be a bona fide occupational qualification and requirement a 
limitation, such as mandatory retirement at a fixed age, must be 
imposed honestly, in good faith, and in the sincerely held belief that 
such limitation is imposed in the interests of the adequate performance 
of the work involved. 

In Large v. Stratford, the court had the opportunity to consider the test set out 
in Etobicoke, in circumstances in which it was clear that the employer had imposed 
the mandatory retirement age at the request of the union. Sopinka J. observed as 
follows: 

The purpose of the subjective element is to ensure that a discriminatory 
rule was adopted for a valid reason, as an occupational requirement, 
and not for a prohibited, discriminatory reason. It ensures that the 
employer is not attempting to defeat the purposes of the Code, in short, 
that the employer does not have a discriminatory motive. Usually, this 
goal will be realized and the subjective element established by evidence 
that the employer honestly believed that the qualification or requirement 
was necessary for the safe and/ or effective carrying out of the work 
(Large v. Stratford (City) [1995], 24 C.H.R.R. D/l). 

Sopinka J. went on to explain that it was wrong for the tribunal and the lower courts 

to insist on evidence as to the employer's state of mind, 

... In some circumstances the subjective element can be satisfied when, 
in addition to satisfying the objective test, the employer establishes that 
the rule or policy was adopted in good faith for a valid reason and 
without any ulterior purpose that would be contrary to the purposes of 
the Code. 

Thus, the respondents must show on a balance of probabilities that they used rent-to- 
income criteria in the honest belief that it was necessary for their businesses. 

The Board finds that the respondents have failed to establish the bona fide 
component of the defence. There was clear evidence that Shelter and Creccal did not 
always apply their rent-to-income criteria. No evidence at all was adduced as to why 
Bramalea used a ratio. Mr. Gonsalves for Shelter used a ratio simply because it had 
come from head office; Mr. Gonsalves clearly did not view the use of a rent-to-income 
ratio as necessary - he tended to treat it as directory as opposed to mandatory. Mr. 



50 



Di Geso, for Creccal, was clearly prepared to change the ratio he used. He does not 
view the use of a ratio as necessary. In accepting tenants for whom the rent did not 
exceed the shelter component of public assistance benefits, Mr. Di Geso was not 
using a ratio at all. 

Further, given the evidence that a substantial number of landlords do not use 
rent-to-income ratios, and that some landlords appear to use the criteria selectively, 
the Board cannot conclude that landlords have an honest belief that applying rent-to- 
income criteria to applicants is necessary for the effective carrying out of the 
business. Given the onus of proof, this Board finds that the respondents have not 
proven bona fides. 

The respondents have failed to establish the second requirement of a 
successful defence under clause 11 (1) (a) of the Code; that their use of rent-to-income 
ratios was bona fides. 

c) Undue Hardship 

Section 1 1 of the Code requires that the respondents prove on a balance of 
probabilities that they will suffer "undue hardship" if they are required to stop using 
rent-to-income ratios in their screening of tenants. The jurisprudence has established 
that in considering what counts as undue hardship, some hardship is "due." As the 
Supreme Court held in Central Okanagan School District No. 23 v. Renaud (1992), 95 
D.L.R. (4 th ) 577 (S.C.C.): "The use of the term 'undue' infers that some hardship is 
acceptable; it is only 'undue' hardship that satisfies this test." Thus, it is not enough 
for a respondent to show that there will be a cost; the cost must be shown to be 
excessive or disproportionate. The cost must be of such significance that a board of 
inquiry would permit a practice that is prima facie discriminatory. The onus is on the 
respondents to prove undue hardship on a balance of probabilities. 

Commission counsel argued that hardship if it is to be proven by the 
respondents, it must be balanced against the fundamental goals of the Code. Counsel 
cited Janssen, supra, where the tribunal balanced the cost of accommodation against 
the importance of freedom of religion, and Emerson Electric, supra, where the board 



referred with approval to the balancing of undue hardship against the goals of the 
Code to protect against discrimination. 

Thus counsel argued that, in the cases before this Board, any hardship, if 
proven, would have to be balanced against the following: 

(i) recognition of the dignity and worth of individuals; 

(ii) the creation of a climate of understanding and mutual respect; 

(iii) the goal that each person feels a part of the community; and 

(iv) effective recognition of those goals of the Code (reflected in its 
preamble), particularly in light of the fundamental need of 
housing and the specific inclusion in the Code of provisions with 
respect to occupancy of accommodation such as s.4 (dealing with 
people aged 16 and 17) and s.2 (dealing with the receipt of public 
assistance). 

We have decided that since the rent-to-income ratio has no predictive value as 

to whether a tenant is likely to default in future, stopping the use of such a ratio will 

not cause hardship. The evidence of Dr. Hulchanski noted as follows: 

Not using an erroneous, invalid measure as part of the criteria in the 
decision to rent to a particular household means, of course, that 
landlords will either be unaffected or that they will be better off. 
Landlords will be unaffected because the measure they are using to 
assess the ability to pay does not actually measure the ability to pay. ' 
Nothing changes when an erroneous measure ceases to be used. 
Landlords will profit by not using this (or any) invalid measure in that, if 
they have vacancies which they delayed filling due to rejection of tenants 
based on the use of such a measure, they will fill these vacancies more 
quickly. 

For essentially the same reasons outlined above - that the landlords have not proven 
that the use of rent-to-income ratios is reasonable - the landlords have failed to prove 
that ceasing the use of those ratios will cause them any hardship. The respondents 
have adduced no reliable evidence that the rate of default would be any different if 
landlords were to stop using rent-to-income ratios in tenant selection. Since the 
respondents have failed to show that discontinuing the use of rent-to-income ratios in 
tenant selection will increase the rate of default (or delinquency) by tenants, they have 
clearly failed to show that any hardship will be caused. Therefore, the landlords have 
failed to prove that undue hardship will result from discontinuing the use of income 
criteria. 



52 



A great deal of evidence was adduced before this Board as to the average costs 
of a default or a delinquency. Since all of that evidence relates to the cost of a default 
or delinquency, none of it is relevant to the fundamental question before the Board 
which is whether using a rent-to-income ratio to screen tenants reduces the landlord's 
risk of default and is, therefore, a reasonable bona fide business requirement. 

In summary, the Board finds that the respondents have failed to establish the 
components of a defence under Section 1 1 of the Code. It is clear in the evidence that 
landlords do not apply the income criteria consistently, and that there is no evidence 
to support a conclusion that there is a greater risk of default when landlords do not 
use income criteria. They have failed to tender evidence that income criteria is 
rationally connected to a business necessity. 

Submission on Direct Discrimination 

Complainants' counsel made an extensive argument that the Board should find 
that the landlord's use of rent-to-income criteria to screen tenants is direct 
discrimination. 

Counsel argued that the use of income criteria was inherently discriminatory 
and, therefore, direct discrimination. Counsel submitted that one of the 
considerations in determining whether a policy or rule was inherently discriminatory 
was the extent of its exclusionary impact. If the impact experienced is more than a 
small minority, individual accommodation becomes inappropriate and the only 
remedy is to strike down the policy. 

Counsel argued that a rule may constitute adverse effect discrimination against 
one group and direct discrimination against another one. A rule may be directly 
discriminatory against a protected group who are completely, or almost completely, 
excluded by its application. The same rule may have an adverse impact upon another 
protected group who experience a lesser, but still statistically significant 
discriminatory effect as a result of the rule. Counsel argued that the only remedy is 
to strike the policy in its universal application. When multiple groups experience a 
discriminatory effect of a policy, the court prefers to strike down the policy rather 



53 



than to maintain it and accommodate those adversely effected. Counsel cited Central 
Alberta Dairy Pool u. Alberta (Human Rights Commission) (1990) 72 D.L.R. (4 th ) 417 
(S.C.C.). 

Counsel argued that a prima facie case of direct discrimination is established 
where it is proved that: 

a) The impugned policy or practice had a discriminatory effect or 
imposes a burden upon the group identified by a prohibited ground 
of discrimination, and 

b) The impugned policy or practice is properly characterized as direct 
discrimination on the basis of one or more of the following indicia: 

i) The policy is facially discriminatory: A policy is facially 
discriminatory if it differentiates on the basis of membership in a 
protected group, or on the basis of a characteristic closely 
associated with the group. 

ii) The policy is intentionally discriminatory: A policy is 
intentional if the discriminatory effect of the policy on the 
identified group was intended by the respondent, known by the 
respondent or reasonably foreseeable by the respondent. 

iii) The policy is extensive in its effects. A policy is directly 
discriminatory if the extent of the discriminatory effect on 
members of protected group is large and significant. 

iv) The policy is inherently discriminatory so that the appropriate 
remedial response is to strike it down. In cases of direct 
discrimination the extent of the exclusionary impact is such that 
individual accommodation is untenable. Consequently the 
appropriate remedial response is to strike the rule down. 

Since we have decided that a landlord's use of income criteria to screen tenants 
results in adverse effect or constructive discrimination against the protected groups 
identified in the complaints, and that the use of income criteria is neither reasonable, 
bona fide, or would cause undue hardship if it was not permitted, we have decided 
not to address the argument that the use of income criteria to screen tenants amounts 



54 



to direct discrimination. We make this decision in part because we have decided that 
the use of income criteria has an impact which is so pervasive that it is proper to 
declare that the rule is contrary to the Code, and strike it in its general application. 

Section 1 1 of the Code does not refer to a distinction made in O'Malley and 
subsequent cases by the Supreme Court that in most, but not in all cases, where 
adverse effect discrimination is found, the appropriate remedy is to uphold the rule in 
its general application, but disallow its use with regard to individuals who have 
suffered a disparate impact by its application. In cases of adverse effect 
discrimination where the impact is so pervasive it is proper to declare the rule as 
contrary to the Code. In Griggs, supra, referred to by the majority in O'Malley, supra, 
the United States Supreme Court struck down the requirement of a high school 
diploma and intelligence tests because of their extensive adverse impact on African 
Americans. In Colfer v. Ottawa Board of Commissioners (1979), unreported (Ont. Bd. 
of Inq.), the Board struck down a height and weight requirement because of its 
adverse impact upon women applying to be part of the police force. We are of the 
view that income criteria belongs to the kind of adverse effect cases where the impact 
of the rule is so pervasive that the remedy must be to strike down the rule in its 
general application. 

Respondents' Submission 

Before addressing the question of what remedy is appropriate in these cases, 
we should comment briefly on the respondents" submission to the Board, made by Mr. 
Doane for Bramalea and Shelter, and adopted by Mr. Luftspring for Creccal. 

Mr. Doane argued that the case before us involves the way a scarce good - 
rental accommodation - is sold or leased in the Ontario market. Professors Halpern 
and Trebilcock testified for the respondents that the rental contract is a form of credit 
contract: the landlord lends its asset to a tenant - an apartment unit - in exchange 
for the tenant's promise to make certain periodic payments until possession of the 
asset is returned. Like all lenders, the landlord faces a financial risk that the 
payments may not be made. This risk includes not only loss of the contracted 



payments, but also property damage and various eviction and re-leasing costs. 
Counsel asked us to look at the evidence presented by the respondents which 
indicated that in various ways a broken rental contract has significant costs to a 
landlord that can reach many thousands of dollars. Counsel argued that for small 
landlords, a single broken contract can mean financial ruin. 

Counsel submitted that prudent lenders employ a pre-contract process for 
limiting the risk of broken contracts and resulting costs. The rental contract, though, 
has two important distinctions from any other commercial credit contracts. The first 
distinction is that with a commercial credit contract, a lender can manage risk 
through manipulation of the price system (interest rates). Landlords are prevented 
from charging differential rents based on risk. The second distinction is the 
possibility of taking security up to the full value of the contract to further reduce the 
risk of default. This option is not available to landlords. The absence of these risk 
management mechanisms leaves landlords in a comparatively precarious position, 
and thus even more strongly encourages pre-contract screening. 

The Board recognizes that landlords are in the business of "selling" a service 
and they have a right to use criteria to assess risk of loss. However, landlords cannot 
use a criteria that adversely impacts protected groups under the Code when the 
criteria has not been shown to be reasonable or bona fide. 

Counsel noted that a landlord cannot perfectly predict an applicant's ability to 
pay or estimate expected default costs. As Professors Halpern and Trebilcock 
stressed in their evidence, landlords, like other credit grantors, are always dealing 
with future probabilities rather than with certainties. However, not only is the 
information that is available to landlords an imperfect predictor, it is also incomplete: 
the need for "perfect" information and the benefits of more information must be 
balanced against the costs of acquiring it. Thus, "in the face of the need to manage 
credit risk, while at the same time confronted with the reality of imperfect, costly 
information, landlords are forced to use proxies such as income criteria to assess 
future ability to pay and other risk factors." Income criteria measure the economic 
burden that rental obligations would pose on tenants, and assist in "determining the 
stability of income and the level of financial resources that could be accessed upon 



56 



default." Counsel argued that income criteria "may not be perfect, but it's all weVe 
got." 

As noted earlier we recognize that the landlords have a valid interest in 
managing risk. However, the landlords presented no evidence to us that use of 
income criteria reduced the incidents of default or was effective in assessing future 
ability to pay. It is not enough to argue that it's "all weVe got." 

Counsel argued further that, to the respondent's knowledge, no private rental 

accommodation market in Canada or elsewhere in the industrialized world has a form 

of random allocation of housing. Counsel argued that by preventing the use of 

income criteria by landlords, all prospective tenants would have to be treated as 

equally meritorious (when clearly this is not true). Further, counsel submitted that: 

... a random allocation regime is likely to impose significant additional 
costs on landlords, who would henceforth be foreclosed from assigning 
any weight to differential default risk in allocating apartments. The 
consequences are analogous to the costs entailed in requiring 
automobile suppliers to sell cars below cost to buyers without the cash 
to pay for them, or analogous to the case of suppliers of goods on credit 
who are required to supply the goods on credit, or banks being required 
to provide mortgage financing, irrespective of the ability of the consumer 
to meet future credit commitments, with likely future implications in 
terms of disruption in this market through reduced supply of rental 
accommodation and higher costs for all tenants. 

Finally, counsel argued a random allocation regime would involve cross-subsidization 

by low-risk tenants (individually meritorious tenants) of high-risk (less meritorious) 

tenants of the kind that Sopinka J., speaking for the majority in Zurich, supra, viewed 

as an objection to common pooling of widely disparate insurance risks. 

This Board was asked to consider whether the use of income criteria in 

assessing tenants for rental housing violated the Code. The Commission and the 

complainants proved in their evidence that income criteria does not predict default. 

They also showed that the use of income criteria has a substantial adverse impact on 

groups protected by the Code. The Commission and complainants at no time asked 

this Board to find that random allocation of rental housing units is appropriate. 

Landlords are entitled to seek credit history, rental history, employment status, and 

use other selection criteria that do not violate the Code. Landlords, however, must be 



mindful that there is a difference between a tenant having no credit rating and a bad 
credit rating. There is a difference between a poor reference from a previous landlord 
and no reference. Denying housing to a prospective tenant because the individual 
has no credit rating, no landlord or employment history, is like denying housing for 
failing to meet an income criteria in our view. 

Counsel argued that the Code does not impose wide-scale affirmative action 
programs. The objectives of such programs are fundamentally different than the 
Code's objective to protect individuals so that they are evaluated on their merit. Wide 
scale affirmative action programs - programs used to alter aspects of the market (e.g., 
pay equity) - are carefully crafted programs with redistributive objectives whose 
conceptual and legal companions are other supply-side programs designed to improve 
the life prospects of members of historically disadvantaged groups. 

Counsel argued that: 

The theory of the case presented by the Commission and the 
complainants, when carefully analyzed, assigns a fundamentally 
redistributive role to human rights legislation in reducing economic 
inequalities, and seeks to radically reconceive the objectives of this 
legislation in a way that is at variance with its normative precepts and 
that is likely to generate long-term empirical consequences that are in 
fact adverse to the various groups on whose behalf this case is being 
advanced. 

Counsel made an extensive submission on market economics and economic 
inequalities to support his argument. For the same reasons as noted above, the 
Board finds this argument unhelpful. The Commission is not suggesting that this 
Board order a "wide scale affirmative action" program. The point is there is no 
evidence that the use of income criteria does what some landlords may well think it 
does - predict default. There is ample evidence from the experts and from academic 
research, cited by the experts, that it does not predict whether an individual will 
default on paying rent. Therefore, there is no reason to believe that landlords will be 
affected by not being able to use the income criteria they have been using. Moreover, 
the complainants were simply seeking the chance to pay market rent. They were not 
asking for special rates or special treatment. 



58 



Finally, counsel submitted that the Code's focus on equality of opportunity is 

grounded textually, both in its preamble and in its restricted definition of "equal." 

The preamble provides in part: 

"AND WHEREAS it is public policy in Ontario to recognize the dignity 
and worth of every person and to provide for equal rights and 
opportunities without discrimination that is contrary to law, and having 
as its aim the creation of a climate of understanding and mutual respect 
for the dignity and worth of each person so that each person feels a part 
of the community and able to contribute fully to development and well- 
being of the community and the Province." 

The definition of "equal" in Section 10 states that "equal means subject to all 

requirements, qualifications, and considerations that are not a prohibited ground of 

discrimination." Counsel argued that this definition reflects the concept of equality 

and a tolerance for unequal results which occur because of differences in social and 

material conditions, individual talents, and choices. 

Counsel's argument here fails to appreciate that an otherwise neutral rule 

which adversely impacts groups protected by the Code will be found to be adverse 

effect discrimination unless the respondent can show that the rule is reasonable and 

bona fide and further that it would not cause the respondent undue hardship to 

accommodate the complainant. In an early ruling on this issue, in Griggs, the United 

States Supreme Court found that the requirement of a high school diploma and 

intelligence tests used to screen prospective employees, which virtually screened out 

all African Americans, was discrimination. The rule was simply unreasonable. There 

was no evidence that the high school diploma and tests were rationally connected to a 

business need. Therefore, the unequal results of these employment requirements 

were not tolerated. Unequal results are permitted under the Code if the rule or 

criteria used to discriminate or distinguish candidates is reasonable and bona fide 

and the complainant cannot be accommodated without undue hardship. 

SUMMARY 

After careful consideration of the submissions of the parties and the 
intervenors (a summary of the submissions of the interveners is at Appendix 1) and 



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review of the extensive evidence presented to the Board, we have decided that the 
respondents' use of income criteria to exclude the complainants from housing in their 
respective buildings constitutes adverse effect or constructive discrimination. The 
Commission and complainants' evidence established a prima facie case for each 
complainant. The evidence was clear that the use of income criteria is not a valid 
predictor of default. There was substantial evidence that the use of the criteria 
disproportionately excludes groups protected by the Code from rental housing. Once 
the Commission had proven a prima facie case, the respondents had to prove that the 
use of the income criteria was reasonable and bona fide and result in undue hardship 
to the respondents if they were required to accommodate the complainants. The 
respondents failed to put forth evidence before the Board to discharge this onus. 
There was simply no evidence to support a finding that the use of income criteria in 
the selection of tenants is reasonable and bona fide. We find that the use of income 
criteria to select tenants violates the Code, whether it is used by itself or in 
conjunction with other selection criteria. 

We are of the view that an order declaring that the requirement of a 
guarantor/ co-signor, credit rating, employment or landlord history is beyond the 
scope of the complaints before us, which clearly challenged the use of income criteria 
as contrary to the Code. We make this decision after carefully considering our broad 
remedial powers under Section 41 of the Code. As noted earlier, we are of the view 
that landlords should be mindful of the difference between a positive or negative 
credit history and no credit history, a landlord history and no history. 

In summary we find that the evidence clearly shows that: 

(i) in the case of Catarina Luis and her application to Creccal, Creccal used an 
income criterion or rent/income ratio, amounting to constructive 
discrimination, and thus is in breach of Sections 2 and 9 of the Code; 

(ii) in the case of J.L. and her application to Shelter, Shelter used an income 
criterion or rent/ income ratio, amounting to constructive discrimination, 
and thus is in breach of Sections 2, 4 and 9 of the Code; and 



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(iii)in the case of Dawn Kearney and her application to Bramalea, Bramalea 
used an income criterion or rent/ income ratio amounting to constructive 
discrimination, and thus is in breach of Sections 2, 4, and 9 of the Code. 

ORDER 

Having found that a landlord's use of a rent/income ratio, or of an income 
criterion - whether alone or in combination with other assessment factors - in 
assessing applications for residential tenancy, breaches the Code, and having found 
that the rights of the three complainants were breached by the actions of the 
respective respondents herein, the Board makes the following orders: 

1. The Board declares that the use of rent-to-income ratios/ minimum income 
criteria violate sections 2 (1), 4, 9 and 11 of the Human Rights Code whether 
used alone or in conjunction with other selection criteria or requirements. 

2. The respondents, Creccal Investments, Shelter Corporation and Bramalea, 
shall cease and desist from using rent-to-income ratios or minimum income 
criteria in selecting prospective tenants whether alone or in conjunction 
with other selection criteria or requirements. 

3. The respondent, Creccal, shall pay Ms. Luis specific damages of $460.00 for 
losses arising when she was denied housing at The Crossways. 

4. The respondent, Creccal, shall pay Ms. Luis $5,000.00 as general damages 
for its breach of Sections 2(1), 9 and 11 of the Code. 

5. The respondent, Creccal, shall pay Ms. Luis pre-judgment interest on the 

amounts set out in 3 and 4 above from May 4, 1992 calculated in 
accordance with the Courts of Justice Act R.S.O. 1990, c.C. 43, Section 27 
rate. 



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6. The respondent, Shelter, shall pay J.L. $4,000.00 as general damages for 
its breach of Sections 2(1), 4, 9 and 11 of the Code, and pre-judgment 
interest on that amount from June 25, 1990 calculated in accordance with 
the Courts of Justice Act rate. 

7. The respondent, Bramalea, shall pay Ms. Kearney $4,000.00 as general 
damages for its breach of Sections 2(1), 4, 9 and 11 of the Code and pre- 
judgment interest on that amount from September 23, 1988 calculated in 
accordance with the Courts of Justice Act rate. 

8. Post-judgment interest pursuant to the Courts of Justice Act shall begin to 
accrue on all damage awards one month from the date of this decision. 

The Board shall remain seized of the case to deal should there be any 
difficulties in the implementation of the orders. 

Dated at Toronto this22nd Day of December, 1998. 




Mary Woo Sims, Member 




APPENDIX 1 



Summary of Interveners' Submissions 

1. The Corporation of the City of Toronto Non-Profit Housing Corporation 

("Cityhome") 

Cityhome is a public, non-profit corporation and is responsible for building, 
renovating, financing and managing affordable housing for low and moderate income 
households in the City of Toronto. About half of Cityhome's tenants pay rents geared 
to income (R.G.I.). Although the complaint is formally raised against private 
landlords, Cityhome, in its submission expressed concern with the possible 
ramifications that the Board decision may have on the use of income criteria by non- 
profit landlords and other public service providers. 

Cityhome submits that the Human Rights Code is infringed where landlords 
refuse to rent accommodation to prospective tenants on the basis that the tenant was 
receiving social assistance. It is their position that the ability to pay rent as 
determined through an income statement is not predicated upon the source of income 
and therefore no discrimination arises. Cityhome further submits that landlords, 
whether private or public are entitled to take measures to ensure that they are renting 
to reliable tenants who will be in a position to pay the rent. The purpose of an income 
statement is to objectively determine whether or not a prospective tenant is able to 
pay the rent. It is Cityhome's position that the use of income statements to evaluate 
prospective tenants is not discrimination contrary to the Code. 

2. DAWN Ontario and the Ontario Coalition of Visible Minority Women 
(CVMW) 

DAWN Ontario and the CVMW adopts, in its entirety the complainants' 
submissions. They submit that landlords' use of income criteria in assessing 
potential tenants creates yet another barrier to housing for women with disabilities. 
The CVMW further adopted the complainants' submission with respect to the direct 
discriminatory impact of income criteria on refugees and refugee claimants because of 
the low income of refugees and refugee claimants. 

3. Federation of Metro Tenants' Associations (FMTA) 

FMTA is the largest tenant organization in Canada. As of March 1994, it 
comprised some 82 affiliated tenants' associations who had approximately 4,600 
members. The FMTA also had approximately 557 individual members. It provides 
free telephone advice to tenants about all aspects of the landlord and tenant 
relationship. 

In its submission, the FMTA adopts the facts as stated by the complainants 
and the complainants' position with respect to direct and adverse effect 
discrimination. With regard to direct discrimination FMTA, submits that social 



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assistance is designed to be the income maintenance programme of last resort in 
Ontario and that social assistance recipients are therefore by definition low-income. 
FMTA submits that a criterion designed to exclude low-income persons will 
automatically exclude social assistance recipients, because low-income status is a 
defining characteristic of being in receipt of social assistance. Such a criterion, FMTA 
argues, is direct discrimination. FMTA submits that the Respondents are wrong to 
suggest that discrimination is not direct discrimination if the disqualification is not 
because of the particular characteristic listed in the Code. 

The FMTA submits that a rule violates the Code's guarantee of equal treatment 
with respect to the occupancy of accommodation for social assistance recipients 
where it results in the exclusion or restriction or social assistance recipients from the 
accommodation being offered. This is either not bona fide, or not reasonable, and 
amounts to adverse affect discrimination. The FMTA submits a rule cannot be found 
to be reasonable and bona fide unless accommodating the group excluded by its 
application will result in undue hardship to the person responsible for 
accommodation, having regard to cost, outside sources of funding, if any. 

The FMTA argues that the Respondents have failed to present evidence to 
support their hypothesis that low-income tenants are more likely to default. FMTA 
submits that the hypothesis advanced by the Respondent generalizes about the 
characteristics of disadvantaged groups without any empirical verification and is in 
their submission more appropriately considered a prejudice or stereotype. The 
Respondents' own data reveal that they are false stereotypes. The FMTA argues that 
no empirically valid evidence was presented demonstrating a correlation between 
rent-to-income ratios and default delinquency. Furthermore, there is no proof that 
reHnquishing the use of income criteria would result in any hardship to landlords, let 
alone undue hardship. 

4. Refugee Groups (New Experiences for Latin American Refugee Women, the 
Canadian African Newcomer Centre of Toronto, the Toronto Refugee 
Affairs Council, the Centre for Spanish Speaking peoples) 

They submit that income criteria, which are used to deny accommodation to 
refugee claimants, are a violation of the rights guaranteed under the Code. The 
refugee group interveners submit that income criteria as used by the private for-profit 
sector constitutes, at a minimum, adverse affect discrimination. They also submit the 
use of income criteria also meets the test for direct discrimination. They argue that 
income criteria result in the exclusion of refugees because of the low income status of 
refugees. Virtually all cases of adverse effect discrimination involve cases in which a 
rule has a disproportionate impact upon protected groups because of a characteristic 
which is prevalent among, but not unique to a single protected group. They submit 
that a requirement for uniqueness, which the Respondents have argued, would nullify 
virtually all findings of adverse effect discrimination. 

The refugee groups also submit that a rule or policy should be found to be 
direct discrimination when it directly targets characteristics which are not only more 
prevalent among a protected group than among non-protected comparator groups, 
but are in fact an ascriptive characteristic of a protected group. Most refugees 
receive social assistance at some point after their arrival in Canada. They submit a 



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rule or policy which disqualifies social assistance recipients because of the very 
disadvantaged status which disqualifies them for protection in section 2 of the Code 
should not be construed as anything other than direct discrimination. 

5. The Anti-Poverty Coalition (The Charter Committee on Poverty Issues, 

The National Anti-Poverty Organization and the Ontario Coalition Against 
Poverty) 

The anti-poverty coalition relies on the facts as outlined in the complainants' 
submissions. They adopt the complainants' submissions with respect to adverse 
effect discrimination and undue hardship. They urged the board to consider 
international human rights law in interpreting human rights and Charter protections 
in Canada, not simply to avoid placing Canada in breach of its treaty obligations, but 
to ensure conformity with the basic values underlying human rights. The anti-poverty 
coalition adopts the complainants' submissions with respect to direct discrimination. 
They also responded to the respondents' submissions that discrimination must 
identify characteristics that are "constitutive of the protected ground" rather than 
characteristics that are shared by many groups in order to meet the Code's "causal" 
requirements; and a discrimination claim may invoke only a single ground and ought 
not to "piggyback" a number of grounds one upon another. They argue that this 
theory creates a formal scheme of isolated categories into which few equality seekers 
would be able to fit. It would disqualify any equality claims which reflect either the 
diversity of members of equality seeking groups, who may not be "constituted" by a 
single characteristic or the shared characteristics of members of difference equality 
seeking groups. The identification of discrete grounds of discrimination in the Code 
should not be mistaken for a requirement that the real world of discrimination occur 
in discrete categories, with group characteristics isolated in watertight compartments, 
and discriminatory effects limited to single groups. They argued that various forms of 
discrimination are inter-related, mutually reinforcing and can operate together. They 
argue that disqualifying equality claims emanating from the complex intersection of 
various forms of disadvantage and discrimination would thwart the purpose of the 
Code which is to provide a last refuge for the most vulnerable and disadvantaged in 
society. 



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